I was supposed to give a presentation at the GuruFocus conference in Omaha, a day before Berkshire Hathaway annual meeting. I was more nervous than usual. I agreed to give this presentation because I wanted to push myself to explore a brand new topic. I wanted to zero in on the investment process.
if you are overcome with fear of missing out on the next stock market move; if you feel like you have to own stocks no matter the cost; if you tell yourself, “Stocks are expensive, but I am a long-term investor”; then consider this article a public service announcement written just for you.
Will my son become a value investor? I don’t know, but I hope that some of the values of value investing will rub off on him and he’ll treat the stock market not as a casino but as a place where you buy businesses at a significant margin of safety
This article will be quite different from my previous ones. I am not going to talk about the stock market, particular stocks, the economy, or the new president. Instead I’ll talk about life.
With his typical rhetorical gusto, President Trump has declared, “Pharmaceutical companies are getting away with murder.” My firm has been increasing our allocation to those “murderers,” and despite Mr. Trump’s comments, we are very comfortable with our positions in the long run (which lies beyond what may end up being a very volatile short run).
Macro forecasting has been disapproved of by value investors, and for 20 years this attitude paid off. The economic climate was favorable, the stock market was in overdrive and price-to-earnings ratios were expanding. Macro did not matter – until the housing bubble and financial crisis. Value investors who had had their heads in the sand got annihilated.
Investors enjoy the unique luxury of choosing problems that let them maximize the use of not just their IQ but also their EQ – emotional intelligence.
We had a lot of great experiences in Russia – mainly from family and friends. But at the same time it was also full of injustice, powerlessness, discrimination, lack of choice, and Russian-like poverty. In America, our past was a great motivator and none of the problems we encountered felt insurmountable. We feel very blessed to be here.
Trump’s ascendancy brings a lot of uncertainty – something the market is ignoring, for now. The business-oriented pragmatism that it loves today comes with nationalistic and protectionist “job creation” rhetoric that may result in trade (or even conventional) wars. U.S. foreign policy, trade, and military alliances that have been in place since World War II are being questioned by the new president.
I never thought I’d be giving writing advice. I was always the worst student in my literature class in Russia. I never received a grade higher than a C on any Russian essay I ever wrote. I have a theory that my teachers got sick of reading and grading my horrible essays, so they stopped and automatically gave me a passing grade out of pity. I don’t blame them.