History demonstrates that participants in financial markets are susceptible to waves of optimism. Excessive optimism shows the seeds of its own reversal in the form of imbalances that tend to grow over time.
We look for some reward of our endeavors and are disappointed that not success, not happiness, not even peace of conscience, crowns our ineffectual efforts to do well. Our frailties are invincible, our virtues barren; the battle goes sore against us to the going down of the sun.
The vanishing, volatile froth of the present which any shadow will alter, any thought blow away, any event annihilate, is every moment converted into the adamantine.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
Most of us stand poised at the edge of brilliance, haunted by the knowledge of our proximity, yet still demonstrably on the wrong side of the line, our dealings with reality undermined by a range of minor yet critical psychological flaws (a little too much optimism, an unprocessed rebelliousness, a fatal impatience or sentimentality). We are like an exquisite high-speed aircraft which for lack of a tiny part is left stranded beside the runway, rendered slower than a tractor or bicycle.