Feb 2015 When you are right you are right!
WE AGREE
NO EXCUSES!
And when you're right- you are right. "Tariffs are a sure road to doom and disaster."
Well said Mitt.
WHAT TO DO?
We do not love giving investment advice on this platform. But here's a few things to keep in mind. The greatest stock investor of our generation- Warren Buffet said this: "When people are fearful be greedy. When people are greedy be fearful." The VIX- known as the "fear index" went from mid-teens during the bull market last month to over 30 on Friday. People are fearful. So do with Warren Buffet said to do. Be greedy.
Amazon is, after Friday, trading at 15 times cash flow- the lowest in its entire history. Free cash flow is expected to grow 33% a year for the next five years. Its forward PE is similar to 2009. They are building their own chips. They currently deploy 750,000 robots. They have the 3rd largest digital ad business. $amzn is a Rumpole buy.
So is Nvidia. It is the leader in AI chips and its moat is at least five years wide. There are 300 Billion with a B commitments to new data center spending for FY 2026 and that is firm. and 95% of that spending will include putting Nvidia's new generation of chips in those data centers. Nvidia is the only AI chip game in town for the next five years. If you have ANY worries (and Nvidia has literally doubled our own considerable wealth in the last 18 months) then Taiwan Semi Conductor is a solid second choice. Semiconductors are exempt from the tariffs and $TSM has committed to investing 100 Billion with B dollars in US manufacturing plants over the next four years. #TSM is playing the game and the current administration the way it needs to be played.
Final thought. The 20 worst days in stock market history since 1970 have been followed by ten of the best days over the next month.
Look at it another way. There is not one time- NOT ONE- that a stock market correction has not been followed by a larger rally, Not one time. True- the 2007 downturn took five years to recover. But that was an anomaly. Usually a large downturn is followed by a larger rally within six months. Think of what happened during Covid. The shutdown caused a massive selloff (we began our third serious accumulation of Amazon at that point- our first was 1999) which was followed by a sustained rally. If you do not need the money today, tomorrow, or next week, the time to buy is coming up.
The market has not hit a bottom. The bottom occurs when everyone who is afraid has sold all they have. There are technical indicators we use to find a bottom- and it is near. But if you do not care to time the market, and have a 1-5 year horizon on investing, then just start buying. 10 share of Amazon and Nvidia every day until you've spent your nest egg. Then relax, have a beer and watch some baseball.
If you have ANY concerns- just reread what Warren Buffet said to do- then do it.