A lot of Warren Buffett followers argue that timing to buy stock is less important as compared to buying under value stock. According to this group of investors, they are prepared to ride through the ups and downs of the market. If a stock is brilliant, they don't mind to practice buy and hold strategy. To them finding a good stock is more fruitful as compared to trying to time market entry.
I am a big fan of Warren Buffett. Did Warren Buffett timed the market? I had asked myself this question previously. My conclusion is Warren Buffett did timed the market. He always bought stocks during down turn and practice buy and hold for long term investment afterward. So people saying Warren Buffet did not timed the market is not right. The different is he only timed the market during crisis. He seldom time for a minor correction because short term up and down is unpredictable. However major correction is unavoidable, that is why he is prepared with huge cash pile for big buy during crisis. He bought Washington Post in year 1974, Coca-cola in 1988 and most recent GE and Goldman Sachs in 2008. If he did not time the market then why he always purchased stock at downtime?
I did write a post regarding a sizable correction every 3-5 years and a major correction every 10-12 years. So should we take advantage of it or ignore it totally??
I sold 70% of my stocks at mid year of 2008 and start buying back from end 2008 until early 2009. Just purely luck. Good timing did help a lot.
Don't forget that we, small investor, don't have constant big cash flow to invest as compared to Warren Buffett. Your monthly saving might be negligible compared to your portfolio, how you going to rely on that? To me, portfolio management and applying appropriate strategy are very important. Especially when your portfolio is already sizable.
Therefore, don't time the "kacang putih" drop, but time for significant correction. Normal day just hold on to your good quality stock, preferred growth stocks or growing stock (mid teen is acceptable) with good dividend.
Value investing did not mean that you cannot time the market.
I wrote this because a question posted to me.
Kossan Treasury Share
3 years ago