We’re about halfway through our road trip in the Rockies and getting gobs of sun along with mountain air daily has been fantastic. While I’ve been on a posting hiatus during this trip, it feels appropriate to journal a few thoughts at the mid-way point.
In the real world, it appears Rome is burning.
As the tide is going out across most asset classes, but more notably in growth company valuations and speculative assets (crypto, for one), the inbound from multiple friends re-thinking their investment playbook has notably increased.
There isn’t a ‘one size fits all’ playbook that one can spitball with others. Investment strategy is the intersection of one’s goals, risk tolerance, and most important, one’s own psychological makeup. If investing actively, the only way to figure how the puzzle pieces fit is to be washed out to the ocean a number of times. An up-market hides true psyche, a down-market lays it bare to understand and plan around its flaws.
While the journey is never-ending, my mistakes of the past have slowly narrowed the field of investments I allow myself to participate in. Today, distinct from the past, I take solace in the fact that we keep strong debt and cash positions, avoid the crowd, and generally own equity investments that are well capitalized / have opportunistic management teams / generate a strong current earnings yield on our cost. The cash coming back to us on a regular basis affords optionality to buy down more of existing companies, make new investments, and buffer our runway. That works well for us today, and hopefully for the indefinite future. But without fail, I will get my bell rung at some point, hopefully in a small way, and will be better off for it.
Good luck, or better, good luck planning.