Investing is difficult.
But not investing is even more difficult.
What I mean is that, when markets are frothy or volatile, it takes a great amount of skill to sit and do nothing.
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities. – Charlie Munger
In the markets, activity equals achievement.
So I asked a simple question to fellow investors on facebook a month back.
What Do You Do When There is Nothing to Buy?
The most common answer and obvious answer is to continue reading. Keep it up to prepare yourself for the next opportunity that pops up.
It also helps because it keeps you busy so you don’t have to constantly check what the market is doing.
Other than that, here are some additional ideas of what you can do while the market marches forward and there is less to buy.
- Re-evaluate your stocks
- Read that book, you’ve been meaning to get to
- or re-read a book that you enjoyed
- Go through the investing journals and papers you downloaded
- Analyze your prior holdings to learn from your mistakes
- Flip through as many stocks as possible using the OSV Stock Analyzer or screener to come up with a list of stocks to watch
- Examine your investment philosophy
- Talk with a mentor regarding businesses. If you don’t have a mentor, read past letters and papers written by the greats.
- If you own a stock with physical locations or products, visit a store and ask questions
This post was first published at old school value.
You can read the original blog post here What You Should Do When There is Nothing to Buy.
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