that is a really interesting quote. I think what he is referring to is the fact that prices are affected by overall market conditions such that rational investing does not work. Buy-and-hold investing does not work.
Right now, because of the credit crises, etc... stocks are priced very low, and that is not rational based on their performance. So the rational investor, who maybe bought over the last few years when things were up, is getting screwed unfairly. In fact, what they did was quite rational. Market right now is similar to 2003-2004 (downward). However, earnings is generally good... with some exceptions. In technology, thee has been so sign of a real slowdown in earnings because of lack or corporate spending that I have seen.
hence pessimism is a good environment to do business in = buy low in times like right now.
optimism = the enemy = don't be a sheep and just buy when market euphoria strikes. Notice oil starting to crash.
technology = next big bubble, commodities and energy winding down.
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