John Templeton on market timing

I never ask if the market is going to go up or down because I don't know, and besides it doesn't matter.  I search nation after nation for stocks, asking: 'Where is the one that is lowest-priced in relation to what I believe it's worth?'  Forty years of experience have taught me you can make money without ever knowing which way the market is going.

~ John Templeton

Jesse Livermore on how bull markets end

A market does not culminate in one grand blaze of glory. Neither does it end with a sudden reversal of form. A market can and does often cease to be a bull market long before prices generally begin to break.

~ Jesse Lauriston Livermore

Mark Hulbert on timing a bubble

Needless to say, things don’t go up forever.  Those who nevertheless continue to invest in such an environment do so with the implicit assumption that they will be able to recognize it, in advance, when the bubble is about to pop—and therefore able to leave the party before everyone else.  This is a dangerous delusion, however; not everyone can be the first to leave the party.

~ Mark Hulbert, "The psychology of a stock market bubble," MarketWatch, April 24, 2021

Sometimes people are drawn to investing
because of 'gambler's excitement'

Kevin Duffy on how to navigate bubbles

The roadmap to navigating a bubble lies in its split personalities: limit your exposure to the most bubbly areas and seek refuge in the anti-bubbles.  As the red flags stack up and risks multiply, forget about timing and outperforming the S&P 500.  This is a fool’s errand. 

Resisting the siren song and chaining oneself to the mast is challenging, but easier for the disciplined individual than the investment professional.  A large number of subscribers to this newsletter are employed in the investment industry.  My only advice: try to chart a sound course over appeasing clients, even if it means firing some.  Easy for me to say… I wish you well!

~ Kevin Duffy, The Coffee Can Portfolio, April 26, 2021

Benjamin Graham on market timing

Yet we can not avoid the conclusion that the most generally accepted principle of timing is that purchases should be made only after an upswing has announced itself, is basically opposed to the essential nature of investment.  Traditionally the investor has been the man with patience and the courage of his convictions who would buy when the harried or disheartened speculator was selling.  If the investor is now to hold back until the market itself encourages him, how will he distinguish himself from the speculator and wherein will he deserve any better than the ordinary speculator's fate?

~ Benjamin Graham, Security Analysis, p. 15

(As cited by Dan Ferris, Stansberry Investor Hour, 11:30 mark, January 21, 2021.)

Bob Farrell on retail investors

The public buys the most at the top and the least at the bottom.

~ Bob Farrell, legendary market analyst at Merrill Lynch

Jim Chanos on market timing

I don't know where the market is going.  I don't know that other people know where the stock market's going.  What we do try to do is analyze companies, and we've been fairly successful in doing that.

~ Jim Chanos, CNBC interview, 8:50 mark, April 2, 2020

Mark Hulbert on market sentiment, index funds, and market timers

One indication that we’re a lot closer to the greed end of the spectrum comes from the widespread popularity today of buying and holding index funds. Judging by the 200 newsletters I monitor, market timers are struggling. It’s a good bet that just the opposite will be true at the bottom of the next bear market.

~ Mark Hulbert, "How the 1% at Davos make the same mistakes as we do about stocks and the economy," MarketWatch.com, January 10, 2020

John Templeton on the stages of a bull market

Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria.  The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.

~ John Templeton

BofA's David Bianco on market timing during the global equity crisis of 2010

Now is a good time for anybody that has got anything longer than a week or two, or a month investment time horizon to be buying the best companies in the S&P.

~David Bianco, Head of US Equity Strategy, BofA Merrill Lynch Global Research, "Market Update: Is Volatility Back?", May 7, 2010

Ken Fisher on gold (timing)

The history of gold is that, for most of its history, it's been declining in price, followed by short periods with very rapid spikes in price. In history, if you take out 15% of the months, which have come in 6 or 7 spurts depending on what currency you're in, the cumulative rest of history gold has been a net money loser. Whenever you have something that gets 100% of its return in 15% of the months, you better be really good at timing.

My point is I am neither pro-gold or con-gold, when I am asked, "What do you think about gold?" I ask, "Well, what do you think about your ability to time?"

~Ken Fisher, Intelligent Investing with Steve Forbes, April 23rd, 2010

Motley Fool on the futility of market timing

An aside to all of this optimism
It should be noted that stocks dropped substantially in 2000 leading up to the recession -- just as they've dropped of late. Those examples, however, just go to show how the stock market does not move in lockstep with economic realties. Instead, it's an imperfect prediction machine with millions of analysts, institutions, and individuals trying to incorporate the information they know into daily trading decisions.

All that dynamism makes the market impossible to time, and if you're only starting to worry about recession as we may or may not be entering one, you are way late to the game. To get ahead of the curve, you should start thinking about buying and holding for the long term.
Don't just take our word for it, though. There's also brand-new research from IESE Business School professor Javier Estrada.

Javier who?
Mr. Estrada's recent paper "Black Swans and Market Timing: How Not to Generate Alpha" is one of the most persuasive cases I've read for a disciplined buy-to-hold investment philosophy.

Estrada studied 15 major global stock markets for periods ranging from 31 to 79 years, with the full data encompassing more than 160,000 trading days. What he found is "less than 0.1% of the days considered" actually matter to long-term returns, which means that "the odds against successful market timing are staggering."

So ... don't try to time the bottom
Now, this is a dangerous article to go on record with. If the market does tank this year, I'm going to get plenty of profanity-laced emails telling me that I'm "the real fool now" (seriously, you'd think people would be over that joke by now).

But even if we lose money this year (yes, I'm staying invested myself), we're all going to make a lot more money down the line not by trying in vain to time the market but by adding new money to great companies on a regular basis.

That way, rather than run from the lows, we'll double-down on them ... and supercharge our returns in the process.

~ Tim Hanson, "Will You Cash Out Before the Market Crashes?," The Motley Fool, February 15, 2008

David Kathman on the dangers of bear funds

Using a bear market fund to try to benefit from the market going down is a fool's game for most people. Even the smart people who spend their career doing that can't time the market right over a long period. ... They're playing a dangerous game, and they're only thinking about how much they can win now, and that kind of thinking doesn't usually pay off.

The average investor probably shouldn't be in these funds and certainly shouldn't be buying them when the market is going down, which is when they get the most attention. They're watching the market go down and are thinking 'If I just had a bear-market fund, I could be picking up big gains here' and that's not what bear-market funds are all about.

David Kathman, mutual fund analyst at Morningstar Inc., "Grizzly discovery;
Once a bear market begins, it's too late for 'bear' funds to help," MarketWatch, December 4, 2007, by Chuck Jaffe