Then there's Warren Buffet's approach, which is to understand the "value" of the asset. He uses an example around a farm he purchased, one of his early investments. He likened the stock market to a (hypothetical) crazy neighbor to his farm, who every morning shouts a purchase price over the fence at him. One day, the price is half what it was the prior day! Buffet's lesson is that he learned to remain calm, because the underlying value of the investment didn't change.

Thus the challenge is separating market feedback reactions (aka fear and bidding robots) from real-world valuation adjustments (aka mere delayed demand vs. destruction of long-term value).

Something I did not learn from Warren Buffett, is that the value of a public company is not the stock price x the number of shares. Not in some fuzzy nebulous way or some of the time, but quite definitely in all cases. That's because any market has depth - there are only so many people willing to buy and sell right now at the market price. Most of the owners of, say, Apple (or any company) think it's worth more, maybe a lot more, than the "market" price. If someone wants to buy the whole company they pretty much always have to pay significantly more. It's the opposite for selling. Most of the people who don't own it think it's worth less than the market price, maybe much less.

So the market price isn't as real or as much of a consensus as people think it is. If you average a lot of opinions, the result isn't necessarily anyone's opinion, much less a correct one.