Staying the Course

The key to successful investing is pursuing a good strategy and staying committed to it. That does not mean adjustments are not called for; they are sometimes necessary during a variety of conditions. However, the core principle of investing in quality companies that grow and increase their value over time never goes out of style. That is exactly what the Bull and his partners do.

Market setbacks are a normal part of investing and should be accepted as a necessary phenomenon. They serve to cleanse, exposing unhealthy exuberance, fraud, poor business practices, failed models, and poor execution–a good wake up call for more prudent practice. The call is not just for investors but for businesses too, a time and reminder to weed out bad practices.

Inevitably, the follow-on period is a good one, cleansed of much that went wrong previously. At least for a while, behaviors are chastened and some discipline returns. No investor has a perfect selection record. Making appropriate adjustments is necessary, but not a total overhaul of a sound strategy.

The current difficult period will end, and the aftermath will be a stronger, sounder environment. Investors will once again focus on what creates increasing value and ignore much of the fear-based noise of the present. In the meantime, the Bull and his partners are scouring the landscape for opportunities. Stay steady my friends.

El Toro Solo