How do investment gurus respond when the market falls?
Recently, the U.S. stock market has plummeted. Stay strong together!
When Wall Street's investment gurus face the ever-changing stock market, some become famous overnight by boldly buying the dip and accumulating massive wealth, while others buy too early and suffer painful losses.
Today, let's learn from the gurus' experiences—perhaps we can gain some inspiration.
Warren Buffett, the Oracle of Omaha
Famous Quotes
When the market soars, resist greed and exit early; when it crashes, fight fear and seize the opportunity to buy low. Buy more as prices fall—never panic-sell.
Classic Battles
Buffett survived four major market crashes: 1973, 1987, 2000, and 2008.
Each time, he exited the market a year or two before the crash, avoiding the final speculative frenzy. He waited patiently for the market to bottom out before scooping up his favorite stocks at bargain prices.
Take the 1987 crash: the market plunged 36% from August to October but rebounded quickly, leaving Buffett little time to "let the bullets fly."
Yet he remained calm, trusting that another opportunity would come. His lesson? Some crashes are fleeting—don’t beat yourself up for missing them.
By 1989, Buffett had invested $1 billion in Coca-Cola KO, later increasing his stake to $1.3 billion by 1994. By 1997, his KO holdings were worth $13.3 billion—a 10x return in a decade.
Key Lessons
Buffett’s three crash strategies:
1. Target industries where net assets far exceed stock prices.
2. Trade on intrinsic value: Buy when shares are deeply undervalued, sell when overpriced.
3. Only invest "idle cash"—even in potential 100-baggers, never risk essential funds.
Peter Lynch
Famous Quotes
History shows every crash passes—markets always climb higher. Dips are chances to buy great companies cheaply.
But timing bottoms is hard. Instead of catching falling knives, wait for clear recovery signs.
Classic Battles
During the 1987 crash, Lynch’s Magellan Fund lost 18% ($2 billion) in a day. Forced to sell to meet redemptions, he later admitted fearing "the end of Wall Street."
Yet he outperformed long-term by sticking to three rules:
1. Never panic-sell at lows—the S&P 500 rallied 23% by mid-1988.
2. Hold quality stocks with conviction.
3. Embrace crashes—they create generational wealth opportunities.
Benjamin Graham: The Father of Value Investing
Famous Quotes
Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.
Classic Battles
Graham (Buffett’s mentor) survived the 1929 crash but lost 78% by 1932’s bottom (Dow -89%). His comeback birthed value investing’s core tenet: margin of safety.
Bill Miller: The Contrarian Maverick
Famous Quotes
"Analysts’ data reflects the past—stock valuations depend entirely on the future."
Classic Battles
After beating the S&P 500 for 15 years, Miller’s 2008 bets on AIG, C, and other "fallen angels" during the financial crisis erased his legacy. Lesson? Even legends misjudge liquidity crises.
Philip Fisher: Pioneer of Growth Investing
Famous Quotes
"Research thoroughly—never rush into unfamiliar stocks during downturns."
Classic Battles
Fisher famously predicted the 1929 crash but still lost heavily by holding overvalued stocks. His epiphany? Future P/E matters more than current metrics.
Source: "Qilehui"
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