Stick to what your good at, or else...

Dear Reader,

It is a most unfortunate position we are in.

Of the many people I have the pleasure of calling friends who are professional money managers, I find many are currently frightened. I believe this is being driven by many departing from their past approach to investing, which has led them to achieve impressive records, to become the dreaded “macro market timer”, which we have discussed in past articles.

“Value won’t help you in this market, everything is driven by macro”
“Buy and hold is dead, this is a traders market”
“Buy a stock, when you gain 8%, sell it”
“Momentum is where it’s at, markets are more efficient now, value won’t help”

These are some extracts of the kindly advice I have received over the last few weeks. Well, my only piece of advise to the world regarding such matters is the following:-

“The more the market becomes concerned with macro, the more stock opportunities appear, as individual business dynamics become less relevant for buyers”

“The more value you receive for free from an investment purchase, the less dependent you are on profiting from that value on macro issues”

These are basic tenets I hold to be self evident from historic data. When someone has a basic skill, the worst thing they should do is drift away from using it because it is not today’s fad. It is exactly in moments like these that people that stick to what they do best, that I believe, do best.


Yours sincerely,

Alessandro Sajwani