Several months ago, when Huey Yei and i attended a conference, we shared with a new friend about the intriguing case of Fast Retailing sailing upwards by 70% while the Dow Jones, S&P 500, Nasdaq, Nikkei 225, Hang Seng, STI, and pretty much any global indices one can think of, all crashed by ~50%, in the same 18 months.
Up 70%. While everything else crashed 50%. Same 18 months. The experienced investor looked at us like the 宝宝 baby above.
We clarified that less than 5% of listed companies will ever pass our inhouse acid test.
We believe we have worked until “we got lucky” in identifying the crux of the matter, and not just blindly applying a “framework” for the sake of having something that sounds like a framework.
Here are the “results” of two companies we have been looking at compared to their index, over a period of about 18 months, specifically with the trade tariffs situation seated between:
Instead of focusing on a “discussion between 2 parties”, and getting thrown all over the place, we may do better to focus on businesses that can grow their earnings sustainably even in depressing situations. And only if the management passes our acid test, may the business likely grow stronger.
Possible is all we need.