{"id":19906,"date":"2023-10-12T23:56:00","date_gmt":"2023-10-12T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=19906"},"modified":"2024-08-06T09:09:56","modified_gmt":"2024-08-06T01:09:56","slug":"happy-market-crash","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/","title":{"rendered":"Investors should be happy when market crash"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/#Market_crash_is_a_rare_opportunity\" >Market crash is a rare opportunity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/#Margin_of_safety\" >Margin of safety<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/#The_deeper_market_falls_the_safer_it_is\" >The deeper market falls, the safer it is<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Market_crash_is_a_rare_opportunity\"><\/span>Market crash is a rare opportunity<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Most investors get panic when market crash! However, the successful investors think different. Buffett emphasized the following two passages in his <a href=\"https:\/\/berkshirehathaway.com\/letters\/2011ltr.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">2011 shareholder letter<\/a>:<\/p>\n\n\n\n<p><em>The logic is simple: If you are going to be a net buyer of stocks in the future, either directly with your own money or indirectly (through your ownership of a company that is repurchasing shares), you are hurt when stocks rise. You benefit when stocks swoon. Emotions, however, too often complicate the matter: Most people, including those who will be net buyers in the future, take comfort in seeing stock prices advance. These shareholders resemble a commuter who rejoices after the price of gas increases, simply because his tank contains a day\u2019s supply.<\/em><\/p>\n\n\n\n<p><em>Charlie and I don\u2019t expect to win many of you over to our way of thinking \u2013 we\u2019ve observed enough human behavior to know the futility of that \u2013 but we do want you to be aware of our personal calculus. And here a confession is in order: In my early days I, too, rejoiced when the market rose. Then I read Chapter Eight of Ben Graham\u2019s The Intelligent Investor, the chapter dealing with how investors should view fluctuations in stock prices. Immediately the scales fell from my eyes, and low prices became my friend. Picking up that book was one of the luckiest moments in my life.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Margin_of_safety\"><\/span>Margin of safety<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Because the deeper the decline, the higher the margin of safety of the stock, and the lower the probability of losing a lot of money in investment, which is easy to understand.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_deeper_market_falls_the_safer_it_is\"><\/span>The deeper market falls, the safer it is<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>But one thing is for sure, the deeper the stock market falls, the safer and more profitable it is for long-term investors. Investors should be happy instead (if you agree with this sentence 100% in your heart, then I want to Congratulations), Buffett also holds a similar view. Meaning unless you&#8217;re selling the stock tomorrow, the stock price doesn&#8217;t mean much to you.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>That\u2019s why Buffett wrote in his 2004 shareholder letter: \u201cBe fearful when others are greedy, and be greedy when others are fearful.\u201d<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"145\" height=\"105\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2023\/05\/sp-1600x1200-1.jpg\" alt=\"Market Crash\" class=\"wp-image-19907\"\/><figcaption class=\"wp-element-caption\">credit: hutcheson.ca<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/25\/market-crash-pullback\/\">How to deal with market crash or sharp pullback?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/08\/05\/market-crashes-todolist\/\" target=\"_blank\" rel=\"noreferrer noopener\">Todolist when the stock market crashes<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/\" target=\"_blank\" rel=\"noreferrer noopener\">Investors should be happy when market crash<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/\" target=\"_blank\" rel=\"noreferrer noopener\">Does the stock market fall deep enough?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/10\/volatility-is-friend\/\">Market volatility is investors&#8217; friend<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/20\/2020-market-crash\/\" target=\"_blank\" rel=\"noreferrer noopener\">2020 market crash, why more retail investors than Wall Street made money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/02\/the-uncertainty-in-investment\/\" target=\"_blank\" rel=\"noreferrer noopener\">The uncertainty in Investing<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/09\/10\/wrong-investment-concept\/\" target=\"_blank\" rel=\"noreferrer noopener\">Retail investors&#8217; wrong investment concept not worth trying at all<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Investors should be happy when the stock market crashes, because the deeper the stock market falls, the safer it is<\/p>\n","protected":false},"author":1,"featured_media":19907,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[830],"tags":[],"class_list":["post-19906","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-crash"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/19906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=19906"}],"version-history":[{"count":12,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/19906\/revisions"}],"predecessor-version":[{"id":29009,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/19906\/revisions\/29009"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/19907"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=19906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=19906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=19906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}