The above quote is from John Maynard Keynes, the famous British economist of the 1930s. This wisdom still holds true today. As one of the most influential economists of the early 20th century, he significantly contributed to the development of theory on business cycles.
Almost no one wants to own whatever is closest to a multi-year bottom. So how is it possible that so few people will make money on a major move? Successful investors are defined not by what they do in a bull market but by their boldness in bear markets, taking advantage of business cycles. The successful investors of tomorrow will be those that seize the opportunities of today.
Financial assets repeatedly cycle in and out of popularity. Our style of investing is about recognizing when any given asset is extremely out of favor. We then start gradually buying that sector.
Precious metal and raw material ETFs (GLD, SLV, GDX, GDXJ, and XME) remain among the best current bargains available in the global financial markets. Emerging-market equities (EEM, EWZ) have rebounded reasonably from their late August 2013 bottoms.
The best buys are made when people are overwhelmingly fearful. However, very few investors have the discipline to capitalize on the crisis because their emotions will not allow them to go against the herd. Time after time the most profitable trades are the toughest emotionally to execute.
“The way to make money is to buy when blood is running in the streets.”
John D. Rockefeller