Recently, I was at an investors’ gathering where fund managers, investment analysts and full-time investors meet once every two months, and some peers shared with me how they wished they had took their time in deploying their funds when they first started as they would probably have performed better had they bought more during market dips.
Such is the current short term voting state the markets are in that when one company announces good results, investors rush to push its price up 20, 40, 50%, well ahead of its fundamental growth, and when the converse happens, their share prices get punished mercilessly by even more.
Taking it slow might seem to be timing the market, which is not ideal. I wish to emphasize that it is rather an awareness of the current volatile market conditions where funds are moving in large amounts and affecting equity prices worldwide. To illustrate this point, many times, I find myself doing massive research on 10 or more high quality companies but ending up only investing in one. Have no doubts that if all 10 companies were to fulfill all of what this one company has, I would have invested in all of them.
It will be critical and prudent to understand and not be tempted by the market share of the company, but what the management and ground crew did to win new business that counts. A number one domestic company could find itself quickly losing market share if it neglects its customers in a blind chase of fame or money. A “lowly” contender could find itself winning grounds if it has a clear mission and delivers what they promised to their customers. A Michelin restaurant with arrogant chefs and serving staff can close down while a passionate roadside Tze Char stall can have overwhelming queues even with self-service.