Buy low, sell high

"Buy low, sell high" is such obvious investing advice that it is taken as a joke, but really, it is what lies at the heart of fundamental analysis, and technical analysis, and even a lot of weird quant stuff.

We all know what "buy" and "sell" mean. But it gets tricky when you think about what "low" and "high" mean. Compared to 1850, everything is selling really high right now. Should we sell everything? Probably not. This gets at the "joke" part of the saying, since knowing what constitutes "high" and "low" is very hard, so telling someone "buy low, sell high" is just about as useless as telling them "invest in such a way as to make money."

Each school of investing thought has its own understanding of what high and low mean. fundamental analysis defines high based on revenue, assets, and other accounting metrics. Technical analysis defines high based on past price history. Quant stuff mixes both and adds in a slew of other data that may-or-may-not contribute useful information to show high and low values. So who is right?

Every good economist answers a question with another question, so my answer is: Over what timeframe? Considering only a single day's trading range, buying at the absolute top, right at the end of the day, is objectively the worst price you could get that day. But if your timeframe is 2 months, you may still be getting in low relative to where you expect it to end up. Etc. So for me, the question of timeframe, and relatedly, exit strategy, is the most important investing question that most people don't spend much time thinking about.