The old adage: Buy Low, Sell High is so simple yet remains elusive for so many. Whether you are buying businesses, real estate, stocks, or grapefruits – you want to buy low and sell high.
The ultimate challenge in doing so relates to psychology and herd mentality. People believe that past performance is indicative of future performance. They also believe that an investment that has gone up so high can and will only continue to do so. Finally, owning an asset that has significantly declined in value, one begins losing confidence in their position and shuns sending good money after bad.
I have found that being a contrarian has served me well throughout my lifetime. Ultimately, if you hold a high conviction for your positions and you own high quality assets, when Mr. Market offers those same assets at a discount, you should not hesitate to increase your position.