Should investors buy low and sell high?

The concept of "buy low, sell high" is widely discussed but can have different interpretations depending on the context. Here are some expert insights:

1. Keith Rabois on Venture Capital: The buy low, sell high strategy doesn't apply well to venture capital, especially beyond early stages. Early investments are inherently low-priced since startups lack financial substance. Later-stage investments lack asymmetric information, making it harder to consistently buy low and sell high, akin to greater fool theory 1 2.

2. Brian Feroldi on Public Markets: Although the strategy sounds logical, studies show top-performing companies drive most market returns. Often, stocks that have already risen significantly continue to do well. Feroldi suggests that good investments can be made in companies that have shown strong gains, contradicting the buy low aspect 3.

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     1

     Buy Low, Sell High?

     00:03:17
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     2

     Venture Capital Strategy

     00:17:00
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     3

     Investing Insights

     00:37:58
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     4

     Buy Discipline Over Sell

     00:46:42
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     5

     Rethinking Investment Strategies

     00:43:35
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     6

     Investing Psychology Unpacked

     00:50:10
     
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     7

     Buy Low, Sell High

     01:52:51
     

3. David Gardner on Momentum Investing: Gardner argues that "buy low, sell high" misleads investors to wait for dips, which may not occur. Successful companies often continue rising, advocating for momentum investing—buying stocks with strong performance 4 5.

4. Jaspreet Singh on Investment Psychology: The psychological challenge of buying low is immense, as lower prices often signal market pessimism. Singh emphasizes psychological resilience, suggesting that following the strategy requires strong conviction and patience 6 7.

Ultimately, while buying low and selling high is theoretically sound, its practical application varies considerably across different types of investments and market conditions.