Think about it this way. If the goal of investing is to buy something when it is cheap, those opportunities don’t exist in bull markets. Buying something of value but is truly undervalued can ONLY occur when no one wants to own a particular asset. There are a couple of caveats to that statement. As an investor, you must know the asset’s actual value and be willing to hold it long enough for the market to recognize it.
For most investors, investing and being willing to “be wrong” for an extended period is difficult. Eventually, psychological pressures outweigh investor convictions. Whether it’s performance chasing, herding, or loss aversion, eventually, investors abandon their positions before the value is recognized.
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