So these are the moments when the share market bears say "I told you so" with a smirk.
The S&P/ASX 200 Index (ASX: XJO) has plunged 8% since the start of the year, while the S&P/ASX All Technology Index (ASX: XTX) has lost a horrifying 17%.
GMO co-founder and famous perma-bear Jeremy Granthm was at it again last week, warning that this correction was just the start of a massive crash.
"We are in what I think of as the vampire phase of the bull market, where you throw everything you have at it: you stab it with Covid, you shoot it with the end of QE and the promise of higher rates, and you poison it with unexpected inflation… and still the creature flies," he wrote on the GMO blog.
"Until, just as you're beginning to think the thing is completely immortal, it finally, and perhaps a little anticlimactically, keels over and dies. The sooner the better for everyone."
He personally would escape shares, especially growth stocks.
"Speaking personally, I also like some cash for flexibility, some resources for inflation protection, as well as a little gold and silver."
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Why pessimists like Jeremy Grantham are wrong
Frazis Capital Partners portfolio manager Michael Frazis told The Motley Fool he disagrees with Grantham.
"Investors who liquidate in market crashes often get temporary relief when markets go lower, but invariably it's the investors who buy during times like this that make the best long term returns."
Serial pessimists like Grantham, who predict doom and gloom every year, are bound to look like geniuses every few years, just because of natural market cycles.
According to Frazis, such cynics are "doing no one any favours" by encouraging panic selling.
"Usually constant doomsayers are ignored," he said.
"The fact Jeremy Grantham is in the headlines now says more about everyone else, and the current state of angst amongst investors, than whether he is right or wrong."
Frazis pointed out that in retrospect, 2008 — when the global financial crisis hit — was "a great long term buying opportunity", even though the selling continued into 2009.
"Jeremy Grantham was calling for further crashes in 2010. Similarly, many of the largest investors in the world swore off technology after the tech crash, and then missed the vast bulk of value creation over the following two decades," he said.
"In both cases, the bearish view was vindicated in the short term, but looking back we can see how misguided that really was."
Take a long-term view
Frazis urged investors to take a long-term view during turbulent times like now.
"This has been the largest rotation out of technology since the financial crisis, which proved to be an exceptional buying opportunity," he told The Motley Fool.
"Right now in the middle of a market panic, long term business plans are strongly out of favour."
According to the fund manager, some sentiment indicators are now at "10-year lows". It is no time to crystallise paper deficits into actual losses.
"There are good reasons to be apprehensive in the very short term right now," he said.
"But those who take a long term view and end up holding the shares of companies will end up receiving all the value those companies create in the future."
