Friends,
You survived!
Last week was one of the wildest we’ve had in some time. My portfolio (Stoffel, here) fell precipitously on Monday with the rest of the market. It was easy to be pessimistic:
- The Nikkei crashed over 12% in one day
- The unemployment rate was inching higher
- Amazon was warning about weakness with U.S. consumers
But over the ensuing three days, my own portfolio rallied nearly 9%. As I write this, it’s easy to be optimistic:
- The Nikkei rebounded by over 10%
- Jobless claims came in smaller than expected, making the labor market appear more resilient
- Several other companies (i.e. Uber) claim that there’s no weakness showing up from U.S. consumers.
All of this points to one very clear conclusion: Nobody knows what the hell is going on.
Here’s the rub: nobody ever has!
When we learn history, we do so from a vantage point several decades later. We know exactly what happened following certain events, which lets us create a narrative that fits nicely with them.
In real life — and in real-time — it is nearly impossible to see how such events will unfold. As investors, that doesn’t mean we throw up our hands and give up. It means we focus on what we do know:
- We buy businesses with wide moats
- We keep an eye on valuations
- We remember the shades of grey: we don’t have to be “all-in” or “all-out” on a stock when big news hits. We can do nothing.
- We live below our means and remain invested.
Those aren’t sexy attributes to focus on. But over the long run, they create the conditions for vast market outperformance. And in the end, isn’t that why we’re doing this in the first place?
Wishing you investing success,
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Brian Feroldi, Brian Stoffel, & Brian Withers
Long Term Mindset
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P.S. Our newest offering, Stock Investing Mentor, launches in a few weeks. Click here to get on the waitlist and find out more.
