Marks says investor psychology swings from flawless to hopeless while reality fluctuates more moderately.
“in real life things fluctuate between pretty good and not so hot but in the minds of investors, they go from flawless to hopeless.”
Marks says it's generally bad to buy what everybody loves and good to look at what everybody hates.
“in general, it's a bad idea to buy the things that everybody loves and it's a good idea to buy the things that everybody hates.”
Markets oscillate between extremes of sentiment that drive prices away from fair value.
“The pendulum of financial markets swings constantly between euphoria and depression, between celebrating good news and obsessing over bad news, and therefore between overvaluation and undervaluation.”