what we as investors should be spending our time doing in times like these
Pace the Outposter, I think this thread actually has been about investing, not just investments. Or rather, while most posts have been (appropriately) about companies, what emerged and has been sustained here over time is a community of investors engaged in regular dialogue on a fairly broad range of topics. In that context, I'll take my stab at answering your question.
Like many around here, it was the boom, and then the bubble, that lured me into greater involvement in the market. That meant spending countless hours doing everything from reading about investing theories, to boning up on specific sectors and companies, to tracking daily stock prices and following broader economic and technological trends. And again like many around here, my inexperience generated excessive optimism, naive belief that past cyclical patterns were obsolete, and cocky dismissal of all the oft-repeated and sensible counsels of prudence. For me and perhaps my general class of investors, then, the question is not just what we should do in present circumstances, but what kind of investor we want or intend to be now that the game has changed from the one we started out playing.
For me, having made over the past three years just about every investing mistake it is possible to make, the lessons that have emerged at the end of the day are almost childishly basic: try to locate good companies at reasonable valuations; don't put all your eggs in one basket; try to save and invest on a regular basis; think for the long-term; have reasonable expectations. Perhaps the only fillip on this "LTB&H 101" canon I'd add would be to take some windfall profits off the table if one happens to luck into them.
With regard to where the market is going to go next, I now accept that I haven't the slightest clue, and that nobody else does either--but I also know that things are significantly less crazy now than they were a couple of years ago, and will generally be much, much higher way down the road. To me, lucky to be young enough that my investing horizon is measured in decades rather than years, this implies that it's more important for me to focus on inputs than outputs. This means paying attention to the stuff I can control (how much I spend, save, and invest; what I invest it in) rather than the stuff I can't (what Mr. Market will do next week; when the recovery will really get going; what the free cash flow of QCOM will be ten years from now).
So I keep loose tabs on my companies and sectors to see if my initial confidence in their long-term future prospects seems misplaced; I keep a lazy eye out for prospects that might be worthy of joining the club; I hold; I try to buy more of a range of things on a regular basis; I get on with the rest of my life.
The bottom line is that I'm no longer trying to be a cigarrete boat zipping through the waves, constantly at risk of capsizing. I'm content to be (well, more like grudgingly accepting that I should be) a raft born along by the underlying current, hopefully with some extra oomph gained by some strategically placed individual GG and similar investments that will serve as sails to catch the winds of change.
tb/A@bettbbywillhavetomakehisowndumbmistakestoo.com |
