Originally Posted by
Baa_Baa
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.