The market can stay irrational longer than you can stay solvent.
About this quote
- What does it mean?
- Market irrationality can persist longer than an investor can survive financially.
- In plain terms
- You might be right about the market but still run out of money before it corrects.
- What can you take from it?
- Manage risk to survive long enough for logic to prevail.
Where it applies
Putting it to work
Questions to consider
- How long can you afford to wait?
- What defines your solvency?
Another view
It assumes markets eventually become rational.
More from John Maynard Keynes
Successful investing is anticipating the anticipations of others.
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