Friends,
Last week, my (Stoffel, here) neighbor shared a story about a near-fatal car crash.
Her 11-year-old niece was in the passenger seat while they drove the highways of LA in the late 1990s. It went something like this:
"We were driving between two huge semis in our tiny Camry. A few hundred feet in front of us, a truck blew its tire out. The tire was coming right at us.
Obviously, I wanted to swerve out of the way. But if I went to the right or left, we would have decapitated ourselves. And if I slammed on the breaks, we'd get rear-ended. I had less than a second to make a decision.
So we did the only thing we could: WE KEPT DRIVING AHEAD!
I'm pretty sure the Camry came off the ground for a few seconds, but somehow -- we landed upright and made it off the highway. None of the cars around us crashed, either. It was a miracle."
Obviously, my neighbor would have given anything to have had a lane to swerve into. But she didn't. So she made the safest possible choice available -- basically, doing nothing.
In the past two weeks alone, we've seen tariff threats against Europe and China increase, had those same tariffs voided by two courts, and then had them reinstated for the time being. Each time, the markets reacted (though those reactions have waned over time).
Along the way, if an investor overreacted to any of these changes, they shot themselves in the foot -- or at least lost hours of sleep along the way. That's why in times like these, it's important to remember that the simplest choice -- doing nothing -- is always a valid option.
The three of us have increased our cash positions, but the majority of our cash is still in stocks. Between now and whenever these tariffs fade in importance, we will keep our eyes on buying great businesses at reasonable prices and then doing nothing.
If nothing else, it makes our decision-making process much easier and lowers the chance of making fatal, emotion-driven errors.
Over the long run, avoiding such errors is 90% of the battle.
Wishing you investing success,
|
|
Brian Feroldi, Brian Stoffel, & Brian Withers
Long Term Mindset
|
