Buffet does a good job of explaining Graham's philosophy. "Mr. Market" is fickle, and serious long term investors dont give him much space in their head, on a day to day basis.
He further explains, "if you cant handle" a 30 percent or even higher haircut on a stock (emotionally), the maybe you need to consider another type of investment, say, maybe real estate which is less volatile short term.
While I admit to making some past mistakes "listening to closely to Mr. Market", and even selling some shares I should have held in the past, I count that up as a "tuition payment" for my education, and worth the money. That's because I have a good handle on it and dont panic sell anymore.
Indeed, I have some cash "ready to pounce" on cheap shares if they come along, so I welcome a pullback, and the bigger the better.
I monitor my cash (aka money market or government bonds, such as SGOV) and usually keep it around 20 to 25% of the portfiolio value "unless we have.a market crash" AND I see a V shaped recovery ahead.
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