Quick update - there's now been a hefty selloff in Greek stocks over the last few days on more default/bailout worries. Since the market has rallied so much from the lows earlier this year, it is quite possible that a correction will continue for a few weeks or even 2-3 months. Selloffs of 20-35% occurred in prior bull markets of this type, so it's quite likely we see the same again over the coming months and years. However, the historical record of bull markets after crushing bear markets like this, is that they shrug off such corrections after a few weeks or months, and eventually move to significant new highs. So, I would say that for anyone flat, now is a good time to make some investments - just be ready to see 20-30% corrections from time to time.
I continue to view the best strategy as allocating a hefty chunk of long-term capital, then ignoring it for the next few years. By 2017 I am pretty confident that Greek assets will be selling for considerably higher prices. The news that is causing this selloff will not be news in 2013, 2014, 2015, or 2016+, when I plan to start selling. The price in those years will be determined by how Greek corporate earnings are doing in those years and prospects for the next few - and no matter what happens in the short-term, it is difficult to conceive of scenarios where prospects are not much better than they are today or have been in the last year. To make money investing after crushing bear markets, it is necessary to 'hold your nose' and ignore the bad news, and instead rely on very cheap valuations, the point of maximum pessimism having been reached, and the high probability that conditions will return to something more normal in forthcoming years. That is the essence of buying when - or after - there is 'blood in the streets'.
I continue to view the best strategy as allocating a hefty chunk of long-term capital, then ignoring it for the next few years. By 2017 I am pretty confident that Greek assets will be selling for considerably higher prices. The news that is causing this selloff will not be news in 2013, 2014, 2015, or 2016+, when I plan to start selling. The price in those years will be determined by how Greek corporate earnings are doing in those years and prospects for the next few - and no matter what happens in the short-term, it is difficult to conceive of scenarios where prospects are not much better than they are today or have been in the last year. To make money investing after crushing bear markets, it is necessary to 'hold your nose' and ignore the bad news, and instead rely on very cheap valuations, the point of maximum pessimism having been reached, and the high probability that conditions will return to something more normal in forthcoming years. That is the essence of buying when - or after - there is 'blood in the streets'.