Hello friends,
Welcome to the 5th edition of The Rational Investor Newsletter. Every business day, we share a timeless bit of wisdom from a legendary investor, followed by a little commentary to help Main Street become better investors!
Onto today's quote...[emphasis is mine]:
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“There will always be investors who want to try to predict the stock market despite all the studies which demonstrate the futility of such a quest. The intentions of these investors are laudable (optimizing the return on their capital) but they remain illusory.
This translates into phrases like ‘I find the market expensive, and I think we should get out of the market temporarily’ or the famous and recurring phrase: ‘I don’t think it’s a good time to invest in the stock market.’
The reasons provided change from one year to the next, but it always comes down to the same mistake: depriving oneself of owning quality companies out of fear of macro-economic and/or political events (which are undoubtedly temporary in nature).”
If you’ve ever found yourself saying, “I’ll wait until things settle down,” you are not alone. But as Rochon points out, this is almost always a mistake.
One of my favorite maxims is that
"The market always looks either too expensive or too risky."
Obviously, those feelings are synonymous.
Though, we shouldn't be surprised by this feeling, because it's true that the market always looks risky in the moment.
There is, and always will be, a headline or economic forecast that feels unsettling. And right now is no different.
But, equally, despite all the uncertainty, quality businesses—and the patient investors who own them—have thrived through it all.
The cost of waiting for clarity is usually missing out on progress. Thus, the real danger isn’t investing at the “wrong time.” It’s finding reasons to keep yourself out of the market.
There will never be a time when the market looks like clear blue skies as far as the eye can see.
Patience through uncertainty is the only path to good returns. Own the market, and never sell.
It's never easy, but it has always been the right decision.
Until next time, invest rationally.
-Ashby
P.S. If you'd prefer this in podcast form (plus me riffing a bit more on this topic), you can listen to it via The Rational Investor Podcast.
