Principle 03 of 06
Buy fear, trim euphoria
The market regularly offers great prices - usually when it feels worst to buy.
The idea
Markets swing between fear and greed far more than the underlying businesses change. Over four years, AI stocks went through a deep bear market, a frenzy, and several sharp shakeouts - while long-term demand kept rising.
My job was not to predict those swings, but to act sensibly when they happened: add when others were panicking, and take some money off the table when everyone was certain prices could only go up.
Why it matters
Buying during fear lowers your average cost and raises your future return. Trimming during euphoria protects gains you’ve already made. Together they turn volatility from an enemy into a source of return.
How I applied it
Across the four-year journey
2022
Started the whole portfolio in a bear market, when semiconductor shares were priced for recession.
2024
Took partial profits on my strongest chip positions after a huge run, recycling them into less-crowded areas.
2025
Added to core holdings during the efficiency scare and tariff sell-offs instead of selling.
2026
Rebalanced again to bank gains as parts of the market became crowded.
In practice
My working rules
- ✓Keep a watch-list and target prices ready before a sell-off, so you can act calmly.
- ✓Ask whether the fear is about the price or about the business. Only the second is a reason to sell.
- ✓When something you own feels “obvious” to everyone, consider trimming.
- ✓Buy and sell in stages, never all at once.
Watch out
The trap: catching a falling knife
Not every sell-off is an opportunity. Sometimes the business really has broken. Buying fear only works when the long-term thesis is still intact - so I re-check it before every add.
Key takeaway
“Be greedy when others are fearful, and a little fearful when others are greedy.”