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- Don’t Forget To Be An Investor
And Don’t Be Surprised As Market Conditions Will Get A Lot Worse
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These moments define you as an investor… We are in the early stages of a massive financial reordering… U.S. government deficit spending is completely out of control… The Fed has become the overwhelmingly largest holder of U.S. Treasury obligations… Retail investors still have a huge appetite for stocks… |
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For the last week we’ve seen stocks trading with the kind of volatility that you only see once in a decade.
Last week, I told you that while most people hate to see market action like this, these are the moments I live for.
And these situations are what will define you as an investor. If you can learn to ignore the volatility and the fear you hear all around you and simply focus on buying great businesses when they’re trading at good prices, you’ll be fine.
There are two caveats to my advice:
#1. Don’t buy anything you might have to sell in the next five years (minimum) or, even better, for the next decade.
#2. Make sure you only buy truly great businesses that you understand and that you’re virtually certain will continue to produce rising sales and earnings for the next 20 years.
Everyone’s circle of competency will be different, but, as an example, these are companies we’ve covered over the last three years in The Big Secret On Wall Street. I’d bet most of you can easily understand their products and services.
BWX Technologies (BWXT; ROE: 28%) – market leader in small nuclear reactors (the “spice” must flow)
NVR (NVR; ROE: 40%) – ultra-high-quality homebuilder that consistently buys back stock
Franco-Nevada (FNV; ROE: 10%) – highest-quality gold and copper “streamer” and excellent inflation hedge
Philip Morris International (PM) and British American Tobacco (BTI; ROE: 20%+) – leading purveyors of “safer” smoking devices and nicotine pouches, some of the world’s oldest and most valuable brands
The Hershey Company (HSY; ROE: 50%) – one of America’s oldest and most beloved brands and one of the world’s all-time great businesses
Uber (UBER; ROE: 56%) – leading provider of ride-sharing services and one of the world’s most valuable brands
And, stick with us here. In our Journal, I’ll continue to share extraordinary opportunities, like I did 10 days ago when I pointed out that Rémy Cointreau (“A Very Superior Old Business”) was trading well below the value of its inventory alone!