Friends,
The first two years of the American Civil War could not have gone worse for the North: a vacillating president with no military experience, generals who were unwilling to attack the South, and an embarrassing defeat at Manassas. By late 1862, the South was on the brink of diplomatic recognition from Europe. Slavery -- it appeared -- was going to survive well into the future.
But then, a stunning series of events turned the tide. Confederate president Jefferson Davis abandoned his defensive stance and had troops invade -- unsuccessfully -- Maryland; Abraham Lincoln issued the Emancipation Proclamation. Almost overnight, the narrative surrounding the war shifted. The South lost its advantage.
In his recent book, The War of Presidents: Lincoln vs. Davis, historian Nigel Hamilton outlines the different approaches to decision-making these two leaders took.
Abraham Lincoln had, if anything, erred most in seeking endless advice, discussion, debate, and information from every side and every conceivable person, of every persuasion and color, before being ready to make a decision.
Whereas Jefferson Davis...had not discussed his opponent's preliminary emancipation with a single soul in Richmond. Not a soul!
To be clear, Lincoln's approach teetered on the edge of "analysis paralysis." That said, Davis' unwillingness to even discuss the ramifications of the Emancipation Proclamation with anyone sealed the South's fate.
There are important lessons here for investors.
If you venture into social media, investors can get into "fights" about battle ground stocks like Tesla, Google, and (these days) even Duolingo. The bravado and anger usually strikes us as odd.
Someone who disagrees with you online will rarely (unless they can trade billions of dollars and move the market) cause your stock to go down. And even if they do, that gives you an opportunity to buy more.
Instead of viewing this as a battle to be won, we should be viewing it as an opportunity to learn more -- to consider alternative outcomes.
For many years, I (Stoffel, here) was quite bearish on Sea Limited (see below).
It may surprise you to find out, then, that for a short time last week, Sea Limited was my #1 holding. I continued watching the company, became convinced that my biggest misgivings had been dealt with, and starting buying last year.
In the short-term, an echo-chamber makes us feel really good. In the long-run, it leads to significant underperformance -- both in investing and in life. It's a little less comfortable, but seeking out alternative opinions is what usually sharpens the sword for the best long-term decisions available to us.
Wishing you investing success,
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Brian Feroldi, Brian Stoffel, & Brian Withers
Long-Term Mindset
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