As investors, we learn from the markets during periods of downturns, euphoria, losses and gains. All these point to seasons that exist in every time frame of life, business and indeed, in investing.
We can also learn about times from the Bible in Ecclesiastes Chapter 3 Verses 1-8 which says:
1 There is a time for everything,
and a season for every activity under the heavens:
2 a time to be born and a time to die,
a time to plant and a time to uproot,
3 a time to kill and a time to heal,
a time to tear down and a time to build,
4 a time to weep and a time to laugh,
a time to mourn and a time to dance,
5 a time to scatter stones and a time to gather them,
a time to embrace and a time to refrain from embracing,
6 a time to search and a time to give up,
a time to keep and a time to throw away,
7 a time to tear and a time to mend,
a time to be silent and a time to speak,
8 a time to love and a time to hate,
a time for war and a time for peace.
So you read this and think, how does this relate to me as an investor? As an Investor, there are three “times”.
A time to buy and a time to sell.
A time to rally and a time to sell off.
Then there is a third sacred time, one that stands alone and arguably the most important one:
A time to do nothing.
This is particularly important at the moment. I still have a 5% cash position which I have been deploying ever so slowly, opportunistically. If I had no cash, I would do nothing throughout this period.
Selling because of panic is NEVER the best strategy. When is the best time to sell you ask? (1) When fundamentals change and (2) When there are better opportunities. I highly recommend this podcast: SELLING OUT by Howard Marks himself on selling.
We are in a sell off that will not last forever (Of course we are rallying viciously today). I don’t know if the sell off is over. However, the worst sell offs and flash crashes in history have all come to an end and markets have ultimately returned to all time highs.
Stay the course and execute your plans on high quality companies and management. At least, that is what I’ll do.