For some months now this board has been full of remarks about the terrible state of our portfolios, remarks about the likelihood of a hoped for upturn soon, naysaying about how the upswing may be far away, and discussions about topics which, while educational and useful for broadening out perspective, had little direct relevance to LTBH as a general strategy or to the Gorilla Game concept in particular.
This makes me wonder what we as investors should be spending our time doing in times like these. Should we have fled to fixed income securities and be biding our time waiting for things to pick up? Or, should we perhaps be doing something more assertive? After all, if the markets are near multiyear low, wouldn't this be a great time to be buying?
This does, of course, imply some amount of gamble about how much lower the markets will be going but I suspect that there aren't many of us who think that there is another 50% to lose from current levels. Even if there were a danger of losing another 20-30% percent, don't most of us think this will be quickly eclipsed when things start to cook again, even without a repeat of the feverish bubble? If so, isn't there a greater danger of acting too slowly than of acting too quickly?
To be sure, our evaluations of companies need to happen in a bit of a different context now than they did during the upswing. While we had the luxury of demanding 100% YoY growth as proof of a tornado then, in the current environment it seems like a company is doing well just to equal the prior year with no loss.
Those of us who need to see the tornado before making the investment probably do need to wait until the upswing begins since few tornados of that type are likely to happen when the economy as a whole is having trouble growing, but I don't think that this means that we couldn't find and vet the technology and market so that we could raise a tornado watch. And, those that are comfortable getting in earlier, shouldn't they actually be buying somewhere in here?
After all, if our shared focus is genuinely long term, then making the "mistake" of buying while there is still 10-20% left to go to the deepest bottom should be irrelevant if the investment is going to have gone up 300% by the time we have reached the "long term".
What do you think? |
