Surfing
After a rough start, stock markets ended August with another positive week to close out a positive month overall. The S&P 500 was up for the fourth month in a row, with a 2.3% gain in August. The Dow was up about 1.8%, and the Nasdaq rose about 0.7% during the period.
Success in many fields—including the investment field—requires one to be adaptable and willing to change with the times. In a 2009 interview, Lee Kuan Yew, the first Prime Minister and founding father of modern Singapore, discussed the importance of that ability:
“You cannot maintain your relevance by just staying put. The world changes. There are shifts in the geopolitics and the economics of the world. We have to watch it and ride it. You surf with them. As the surf comes this way you ride the surf.”
In a year in which the U.S. is holding an election, uncertain changes to the tax code are forthcoming, the Fed is seemingly about to start lowering short-term interest rates, and a myriad of current and potential geopolitical conflicts are all wrapped within an investment environment where stocks and valuations are near all-time highs, the ability to change and adapt is about as important as it’s ever been.
The drivers of investment return during the last decade may differ completely from those during the next decade. What works today may not work tomorrow. But the ability to spot opportunity and evolve as the world evolves will never go out of style.
“Our experience is that opportunity regularly migrates across markets, industries, and geographies, as capital flows inflate the prices of some investments while leaving others orphaned. To navigate the natural evolution of markets, we employ an investment approach that is fixed in its general principles yet flexible in its implementation.” —Seth Klarman
Tweets of the Week
In Case You Missed it…
Large Positions - by Ian Cassel
Broyhill Asset Management’s Q2 Letter
Greenhaven Road Capital’s Q2 Letter
Behind The Memo Podcast: The Impact of Debt with Howard Marks and Morgan Housel
Invest Like the Best Podcast: Gavin Baker - AI, Semiconductors, and the Robotic Frontier
Excess Returns Podcast: Value Investing in a Changing World with Aswath Damodaran
The Security Analysis Podcast: Cullen Roche: Macro Musings, Part 2
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