Optimism and pessimism are both emotional states of mind. Value investors need to be rational, anchoring their perceptions in reality. At Brandes, this means analyzing businesses to estimate their intrinsic values so that we can compare these to their security prices. If pessimism (and hence lower prices) dominates market emotions, then buying opportunities are likely to be present. Conversely, optimism may be the enemy of the rational buyer, but it is the friend of a rational seller.  

Source: Berkshire Hathaway, Inc., 1990 Letter to Shareholders