Value of the "Long View"

Over time, I've come to appreciate the rewards associated with taking the "long view".  In short, it's all about selecting great companies and holding positions in them for the long term.

In selecting potential investments, I generally look for the following characteristics:

• solid management: experienced in the field of endeavour; successful track records, ethical and unblemished by scandal; working in the interest of share owners
• solid balance sheets: little debt; strong cash flows; good ROI
• understandable business model 
• competitive advantage
• an enduring market for the company's products/services

As to the long term, I am patient with respect to an entry point for my investments.  As Herr Buffet would opine, it's about waiting for the "fat pitch". Some people may contend that this is akin to "market timing" i.e. trying to anticipate the direction of the market.  

I do not.  Sometimes, market sentiment results in widespread market declines based on fear of loss.  If anything, a study of historical price trends shows that companies with the above-noted attributes are very resilient: they eventually recover and prosper to the delight of investors who invested when others were paralyzed by uncertainties of the day.  

I have the sense that market valuations are getting rather lofty in today's environment: that optimism of the Trump effect is causing markets to rise in an unwarranted manner.  I am slowly building a nest egg and am prepared to wait for markets to correct.  I believe that the chaos in Washington is going to spill over into the markets.  Markets will become quite volatile and will present opportunities for investors who are positioned and prepared to profit from volatility.   

This post was stimulated by the following presentation.   

Three Paths to Finding Value