Sharing some of what we read
We like communicating our thoughts in writing. But sometimes someone else says it so well that it’s better to just share what they wrote.
A research firm that we’ve subscribed to for decades wrote the following this weekend:
“A lesser-known pearl of Wall Street wisdom says that sometimes the best trade is the one you do not make. Investors, and especially longer-term investors, do not have to be active in the market every day. That can sometimes be a difficult discipline when the media pushes a constant barrage of shiny objects to grab one’s attention. From inflation fears to gas shortages to a vertigo-inducing ride in cryptocurrencies, there will always be something that is supposed to demand your immediate attention. Pay them little mind.”
Long term thinking often requires de-emphasizing the current obsession in the news cycle. That’s challenging, because some of the time you really do need to pay attention to what everyone’s talking about. But often, it’s better to zoom out and maintain our long term focus.
Also this weekend, an investor in Hong Kong that we greatly respect shared the following:
“My nearly 20 years of experience ‘in the business’ has been that, if a company is able to sustain its earnings, has a clear balance sheet and its valuation is fair, then the company is very likely to grow bigger and bigger in the course of time – this is in general a more secure way to generate investment gains in a longer term horizon. Painstaking research (which is our forte) helps us ascertain what stocks to buy, when to buy and how long to hold. Building and maintaining an all-weather and sleep-well portfolio for you is accordingly what we aim to achieve and I very much look forward to serving you in this way for decades to come.”
This is such a clear explanation of our investment philosophy that it’s hard to say it any better. We think of ourselves as owners of the businesses we buy. In the long run, we should expect our returns to broadly reflect the performance of the businesses themselves.