Fish in a Barrel
Stock markets experienced some volatility again last week, both to the upside and downside, depending on the day (and time of day). The result was that the S&P 500 finished the week down 1.56%, and the Nasdaq dropped 0.45%. The Dow, with an almost 500-point drop on Friday, finished the week down 2.37%.
Concerns about potentially higher inflation and oil prices due to further Middle East conflicts caught investors’ attention this week. Neither we nor just about anyone else know the degree to which these concerns might escalate or subside in the weeks to come. But there is one thing we do know: when there is volatility, there is also opportunity.
If you’re an opportunistic investor, this is an excellent time to build your watch list of companies you’d like to own if volatility continues to pick up steam.
And looking for companies and potential stocks outside the mainstream is often a good place to start. During volatile times, the things few others know about are often the names that allow one to shoot the proverbial fish in a barrel for those paying attention—and who also have the gumption to act on the work they’ve done in preparation for such times.
“Charlie Munger says that he wants to shoot fish in a barrel, but only after all the water has been let out.... When I look at the people that I would normally think of as very good investors, basically, those folks are really good investors but they aren’t fishing where the fish are. And it doesn’t matter how good of a fisherman you are if you’re not fishing where the fish are.” —Mohnish Pabrai
“One advantage of our common-stock segment is that – on occasion – it becomes easy to buy pieces of wonderful businesses at wonderful prices. That shooting-fish-in-a-barrel experience is very rare in negotiated transactions and never occurs en masse.” —Warren Buffett
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