“We have a history when things are really horrible of wading in when no one else will.” – As we have said repeatedly throughout this book, the only way that Charlie can do that is if he is sitting on a pile of cash in waiting to take advantage of some financial calamity. The reason that other investors don’t step in is that they don’t have the cash to buy anything with. Most investment funds are 100% invested in the market. Why are they 100% invested? Because cash offers a low return and having a lot of cash can severely hurt a fund’s performance.
Misjudgment of other investors…depending on what you’re optimizing for. Not an error if you’re going for short term high risk returns.
