Panic-Proof Through Private Valuation

"Investors who had no idea of the private worth of their holdings were susceptible to being scared out of them. Their only measure of value was the stock price, so the more the price dropped, the more they were inclined to sell. Davis was panic-proof. Wall Street's daily, weekly, monthly, and yearly ups and downs didn't alter his strategy. He held on to shares through demoralizing declines, knowing that the market…"

"as a part owner of every holding in the portfolio."

"The Dow rose from 41 to 160, and the S&P 500 did even better. This unexpected bonanza was a good lesson for Davis. It reminded him that stocks don't read the papers or swoon in response to scary headlines. When they're priced for desperation, they can rally in the face of desperation, escaping the dumps while the companies to which they're attached are still wallowing in the dumps."