“The intelligent investor gets interested in big growth stocks not when they are at their most popular-but when something goes wrong.”
-Benjamin Graham
Yes, something has gone wrong. In this world of free access to information, we live with a dangerous appetite to be “in the know” all the time. Today, social media and artificial intelligence prevail, feeding on panic and fear. This is our new normal. For the first time in history, Wall Street traded without humans on the trading floor. What will AI accomplish next?
Even so, our fundamental strategy remains.
Despite these technological advances and our fast-paced media’ driven world, we believe that today’s prices are a good re-entry point for long-term investors.
We have tried to continue to make our decisions based on fundamentals and will continue to do so. Though at this point in the virus’s life cycle, it is unclear as to the severity, depth, or breath of the impact this will have on the vast global population or life in general. We continue on the yellow brick road.
Our money managers are opportunistically buying new securities that represent strong longer-term businesses which have been impacted by the panic selling.
In the end, I am certain that when the dust clears, we will be drinking our lattes from Starbucks with our friends. My kids will spend endless wasteful hours on their AppleiPhones and IPads. Amanda will still shop at Lululemon and Target and have numerous packages from Amazon on our doorstep. And as always, I will enjoy filling my cart up at Costco and watching football on Viacom’s CBS station.
Fear is both crippling and contagious. For an investor, this panic inevitably leads to wealth destruction.
As the chart above demonstrates, missing the 10 best days in the market can have a dramatic effect on your returns. Stay the course.