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"we should be aware that there are times for caution, times for...

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vic_wattle

3,491 Posts.

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19/06/19

13:29

Post #: 39132535
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Originally posted by MarsC ↑

I am very much in agreement with most of that, especially the bits about trying to think as an owner of businesses, and imagining that the market only opens twice per year (I prefer to imagine the market will close indefinitely, the day after my purchase).

That said, there is no escaping the fact that the business cycle impacts Main Street, as well as Wall St. Some businesses are more susceptible to where that cycle stands, others less so. It is probably prudent to contemplate, that for Australia, whatever the GFC may have delivered, may not be a good marker of what a real "stress test" might deliver. And that we may indeed have drawn the wrong conclusions from that.

Sure, we can try to buy bullet proof businesses - along with everyone else, and potentially pay exorbitant prices (perhaps). This will likely work out fine, over the very long term - sure.

I wouldn't have baught a mining services business at the heights of the mining boom. Neither would most prudent value investor - even those "purists" that like to "ignore the macro".

Suffice to say, that if this stuff was easy, we would all be making an overnight killing. For me, the answer is that we should think long-term, as business owners, and not run helter skelter with each new macro pronouncement, and certainly not try to make exacting forecasts.

But, we should be aware that there are times for caution, times for aggression and times for coasting (which would be most of the time).

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"we should be aware that there are times for caution, times for aggression and times for coasting"

The ERP is suggesting time for aggression as argued by @madamswer.
The US credit cycle is suggesting tme for coasting moving into caution.

AUS 10yr. How much lower will it go? Which direction will it go when monetary policy and fiscal policy are co-ordinated to incentivise people to spend on goods and services. What is the antidote to debt.
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