Many investors are acting on the stock market basing their decisions upon looking or thinking about what the others will do. And so it goes the same old story. “Let’s sell before they sell” they say.. Mr. Market is repeating himself, as the human nature always does historically, being what it is. Driven too much by emotions unequestionably. Ben Graham would again remind us of the “firmness of character” needed to act in one’s belief. You dont need tons of intelligence to have a temperament. But if you don’t have the right temperament, and you act upon what other people do. Well, at least you’re not going to achieve good results in the investment world.
As Ben Graham would tell you today once again : “You are not right because 1000 people or more agree with you, and you are not right or wrong because 1000 people or more disagree with you”.
To be driven by fear and not by rationality, is not a good idea, unequivocally. As you may read on the news this first quarter has been the worst in history for the DOW.
20 per cent down
It was 25 percent down in 2008, the year in which we remember the crisis was much more dangerous.
In 2008 a housing bubble was hurting for real the economy risking to jeopardize the most important assets of families: their homes.
In fact it did, and most people lost their houses. Foreclosures were everywhere. Assets underlying paper were worth ..paper. 2008 was pretty scary.
Now the span of time and the economical-business reasons underlying the downfall of stocks are different.
The virus will not change in the future the wonderful business that is the one you want to own today at a discounted price.
I’m not saying this virus is not nasty and dangerous. Not at all. It is as dangerous as others we have been facing and defeated centuries ago.
Mr. Market, as usual in history turned his mood into panic and started to sell . He’s isolated at home, he is depressed and paranoid. Thus completely forgetting the real “intrinsic value” and the great economics of some businesses he’s ready to serve us at discounted prices.
Now’s the time to take advantage again of Mr. Market. .As long as you have already in mind what to buy. And you can evaluate the business you want to own. Let him serve you.
I dont time the market and I dont make forecasts. Nobody can. And I don’t even feel like Buffett in 1974 like an “oversexed guy in a whorehouse” like Buffett is quoted said in “The making of an American Capitalist”. He was buying everyday like hell. But I know for sure that the “American Tailwind” (as Buffett calls it) will be strong and consistent in the future and good businesses will be booming in America after this pandemic and over the long term. Never doubt America, never bet against this country and the generosity of its people and the good hard-workers that came here from everywhere. They will not sit around.