A lesson from the crash of 1987?

On October 19th, 1987 the Dow Jones Industrial Average endured the single greatest one day drop in its history: a staggering 22.6%. This day would be christened Black Monday. Some say the precipitous fall was caused by a market that had simple gone too far too fast, others blame portfolio insurance. Regardless, the market rebounded and actually finished up for the year. What lessons can you take away from such an event? Today in The Wall Street Journal, Justin Lahart examines the age-old creed to "buy on the dips." How much sense does that make? True, it worked in 1987, but I what could one have seen back then that would've told you that the country wasn't going into a recession? What signs were there that the bull market would last another twelve years? None. buying the dips would've been an act of more reminiscent of blind faith than calculated analysis. Buying dips works in a bull market, but becomes desperate averaging down in a bear market. That is not to say this tactic can't be judiciously applied. If you are a long-term value investor, you want to buy companies as cheaply as possible. Buying the dips helps you accomplish this.