Declines, Disruptions, and Distortions

One: Don’t be surprised. This is the world we live in and we will see this type of movement again and again — it is one of the characteristics of disruption.

Two: Take the time to know a portion of your investment portfolio on a deep level. When you see this type of move, you should be either very comfortable with your asset holdings or very nervous.

Three: Always have a few companies that truly interest you and for which you have a “fair value” gauge. We have discussed on a couple of occasions how we like closed-end mutual funds because market distortions allow you to buy these assets at a discount to their asset value.

Four: Invest in quality.

Five: Invest for the long term.

Six: Know your brain; at times, it will function at a higher level than an artificial neural network.

Seven: There is always something we don’t know. Do not allow that to prevent you from making a decision — make decisions with the information that you do know.

Eight: With every challenging event, there is an opportunity. Search out the opportunities.