There really is something to be said for this. If we look at some people whom were historically correct with investing this completely fits.
I’m just going to show you with some example’s that there is a serious merit to this thinking.
Paul Tudor Jones ones said:
Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.
John Templeton:
“Invest at the point of maximum pessimism.
Bear markets/sentiment always bottom at some point and this creates a perfect entry to buy a stock at the cheapest price possible, in other words the “The Stock is for Sale!”. If you want to attain incredible returns in the stock market, you must find value on oversold stocks.
The first rule of investment is “Buy Low and Sell High”, but many people fear to buy low, because of the fear of the stock dropping even lower, then you may ask “When is the time to buy low?” The answer is: When there is maximum pessimism.
You also find a recently done study about this kind of investment thinking.