There is, among novice investors, a persistent tendency toward feverish impatience. When markets tremble, headlines blare, and portfolios lurch, the inexperienced are seized by a dangerous impulse: to act immediately, and often unwisely. Yet it is precisely in such moments that the wiser course is often one of stillness.
When global markets collapse, even the seasoned may feel the cold hand of panic. Screens flicker crimson, gilt yields plunge, and the press breathlessly forecasts recession – or worse. Yet to those schooled in the classics, such ructions are no crisis of principle, but simply another squall on the long voyage of capital.
Volatility, after all, is not an aberration. It is the very nature of markets. From the bursting of the South Sea Bubble in 1720 to the global banking crisis of 2008, and more recently, the convulsions of Trussonomics and the trade disruptions of the Trump years, the investor with perspective has seen it all before. And the wise, those who take their cue from history rather than headlines, know what to do: remain calm, stay liquid, and buy quality.
Like the changing of the seasons, volatility is no new phenomenon. It has been part of market life since its inception, a rhythm as old as commerce itself.
When I was a student, I found myself drawn to the writings of antiquity, those now called “the classics.” These were not merely intellectual ornaments, but enduring guides to life and decision-making. In today’s article, I’d like to share a three of the lessons they offer – timeless counsel for navigating the tempests of the market.
1. Cicero and the Virtue of Patience
The Roman statesman, philosopher, and orator Marcus Tullius Cicero lived during one of the most turbulent periods in Roman history, witnessing the fall of the Republic, the rise of Julius Caesar, and the collapse of constitutional order. Amid this instability, Cicero remained a fierce advocate for prudence, duty, and virtuous restraint. His writings, particularly De Officiis and Tusculan Disputations, urge a life led not by impulse, but by reasoned principle.
One of his maxims, “Rashness belongs to youth; prudence to old age,” serves as a pointed reminder that not every disturbance calls for a response. In investing, especially during periods of volatility, this principle is invaluable. Markets will, on occasion, swing violently, and often on sentiment rather than substance. To chase these movements is to risk ruin; to withstand them is to demonstrate wisdom.
Cicero teaches us that patience is not merely the absence of action, but the discipline of purposeful inaction. This is especially true in financial markets, where the temptation to do something can be overwhelming. The investor who is guided by reason rather than reaction finds strength in cash reserves, the ballast of quality assets, and the clarity of a sound strategy. He does not confuse motion with progress.
Like a statesman waiting for the opportune moment to speak or act, the investor must learn to wait; not idly, but vigilantly. He must cultivate what the Stoics called ataraxia: a calmness of soul in the face of external upheaval. That is where Cicero still speaks, centuries on.
2. Graham and the Margin of Safety
If Cicero teaches us patience then Benjamin Graham, the father of value investing and author of one of my favourite investing books of all time “The Intelligent Investor”, teaches us precision. Graham wrote of the “margin of safety” – a cushion between the intrinsic value of an asset and the price paid for it. In volatile times, this margin becomes your armour.
At its core, the margin of safety is the difference between an asset’s intrinsic value; calculated through sober, fundamental analysis, and the price one actually pays for it. To purchase a security at a substantial discount to its true worth is to build a protective buffer against error, volatility, and unforeseen misfortune. It is the financial equivalent of a man donning a well-cut overcoat before stepping into uncertain weather: a quiet precaution, not a dramatic gesture.
This principle is not born of pessimism, but of prudence. Even the most seasoned investor, Graham contends, is subject to error in judgement. Valuation is an art as much as a science, and markets are as susceptible to folly as they are to wisdom. The margin of safety acknowledges this fallibility with grace, and insists that one must not merely hope for favourable outcomes, but prepare for the contrary.
Rather than chasing fashionable growth stocks at inflated multiples, I take a more traditional approach to building my portfolio, seeking to invest in conservative financed enterprises demonstrating consistent quality metrics, dividend payments and capable management. These businesses don’t always dazzle in bull markets, but they endure in bear ones.
3. Livermore’s Observation: The Tape Is Always Talking
Jesse Livermore, though often a controversial figure, was one of the earliest modern traders to articulate the psychological and behavioural challenges of market speculation. Born in 1877, he made and lost several fortunes over the course of his career, operating during some of the most volatile eras in financial history including the Panic of 1907 and the Crash of 1929.
Though Livermore’s approach differed significantly from that of the long-term investor, one insight from his writings remains strikingly relevant: “Markets are never wrong; opinions often are.”
This aphorism reminds us that the market, however chaotic it may appear, reflects a dynamic consensus of all participants – rational and irrational alike. Our job is not to argue with the market, but to observe, interpret, and prepare. Livermore described this process as “listening to the tape,” a metaphor for watching price movements and detecting shifts in sentiment, long before the narrative caught up.
For today’s investor, the lesson is not to engage in day trading or speculation, but to remain attuned to reality rather than clinging to outdated assumptions. Forecasts fail, models falter, but the market always reveals its hand eventually. Whether one follows earnings downgrades, interest rate moves, or dividend cuts, the signs are there for those willing to observe without ego.
In times of volatility, this humility becomes a virtue. We must not be anchored to wishful thinking. As Livermore understood, it is better to revise our understanding than to persist in a comforting illusion. The wise investor reads the signs and refuses to chase the crowd, but rather aims to navigate more clearly through it.
In Closing
During the recent market turmoil, I’ve discussed many “hot takes” from new shows and social media, much of which would make you think the entire economic edifice is on the point of collapse. In reality, in less than six months, the extreme plunges of President Trump’s tariff war are being walked back and markets have stabilised. Does that mean the danger is over? No, simply that it has changed form. Regardless, the wise investor recognises that volatility is not the enemy; it is the price of admission. Those who study the classics understand this instinctively. They prepare when times are calm and remain composed when the winds rise. In an age of noise, may we all aspire to the quiet confidence of the seasoned investor – anchored not in forecasts or fads, but in principle.
Steady hands. Seasoned judgement. The rest is merely weather.