Apathy, Disgust, Fear&Panic, & Anger

Thanks StuyvesantGrad70, thanks TMF(The Motley Fool)

Interview with Century Management’s Arnold Van Den Berg
Outstanding Investors Digest Aug. 2006
http://www.oid.com/public/html/excerpts/CenturyMgmt082006/CenturyMgmtExcerpt2006.pdf
Highlights (starting at page 19):

Buying a Bargain.
Buy contrary to the prevailing sentiment. You never feel good, you have sweaty palms, you are leaning against the crowd, engaging in contrary thinking and you’re pretty much alone. The press is telling you that you’re doing the wrong thing. You better believe in what you’re doing and be disciplined – because otherwise I can guarantee you’re going to get shaken out of your position.

You want to buy stocks that are selling for one of the following four reasons:

Apathy.
Coca Cola dropped 50% and went nowhere for 8 years.
You’re so sick of holding a stock that isn’t making you any money that you’re just tired of it and you want to try something else.

Disgust.
When investors have lost money, or a stock’s gone sideways for a long time, shareholders just want to get rid of it. That’s one of our favorite times to buy our stocks.

Fear and Panic.
People own a stock and they're apathetic about it. Then all of a sudden there’s bad news and it starts going down. That’s the final straw. So they get fearful, they panic, and they sell it. When people are in a state of panic, they’re not thinking rationally. They’re just selling because they’re scared.

Anger.
The ultimate state is anger. There is no emotion that is more destructive than anger – both to your intelligence and to everything else that you do. So anger is the most irrational state. And that’s a wonderful time to buy a stock – when people are so angry at the stock that they want to get rid of it at almost any price.

How We Know We Have a Really Big Winner - when people call us and tell us they’re angry about a stock we’re buying. We know we have a winner because it’s such a contrary indicator.