The First 99% of Investing... And What Comes Next

'I'm so sorry, but Joe can't make it to today's meeting. He has to go surfing...'

The call came from one of our hedge-fund client's sales associates at noon. We were supposed to meet at 4 to go over a custom research package we'd put together for him.

Except Joe clearly had other priorities...

When we caught up with him a couple days later, Joe apologized. He said he was super excited about our research. And he explained why he blew us off earlier in the week.

A hurricane was brewing off the coast of the Long Island Sound. It was creating waves that most surfers only dream about. So when Joe saw the opportunity... he jumped on it.

We weren't upset with Joe. On the contrary, when we thought about it, his decision made a lot of sense. As we'll explain, the very traits that made Joe such a good surfer also made him a great investor...

With surfing, most of your time is spent on preparation...

You have to get all your equipment ready, your board waxed, your wetsuit on, and your ankle strap affixed.

After that, you'll spend far more time paddling out to the right distance to catch the wave right when it's breaking. And then you need to wait for the right wave.

It's all an exercise in patience.

The best investors have the exact same mentality as the best surfers. About 99% of the work happens before they hit "buy."

In investing, the prep work starts with finding great companies. Regular readers know we look for a high Uniform return on assets ("ROA")... and ideally plenty of tailwinds to keep boosting returns for several years.

Then comes the waiting game. Investors tend to be quick to recognize good companies. So they're rarely "cheap."

Top investors know that buying at the right time matters. They keep a list of great companies they want to own at the right price.

Then, they wait for someone willing to sell.

Every once in a while, investors lose focus and let great companies get cheap...

This often happens when the market panics during a recession. While we're approaching one of those moments, most stocks aren't there yet.

Today's market is still a tough one. Stocks are hitting new highs pretty much every week... and not many are truly "cheap" anymore.

That brings me to the other trait Joe demonstrated so well...

He was ready to jump when an opportunity arose.

It didn't matter that he had a big meeting coming up. He didn't make excuses. When he saw his chance... he took it.

You can bet that's what legendary investor Warren Buffett will do when the time comes. Buffett is sitting on $168 billion in cash today – the most cash he has ever held in his career.

He almost certainly has stocks in mind for that money. Now, he's waiting for the right wave... the right entry point. When it comes, he'll go "all in."

And when that moment comes for your portfolio... you shouldn't hesitate, either.

Wishing you love, joy, and peace,

Joel
March 22, 2024

P.S. I've been eyeing an incredibly rare short-term opportunity for the past few weeks – and I'm ready to jump in.

While most of the market is expensive today, one small group of companies is the cheapest it has ever been. To be frank, this opportunity shouldn't really exist. And I don't expect it to last much longer...

This past week alone, one of the stocks I've been watching popped 100% in a single day. The situation is moving far faster than I expected. So my team and I are dropping everything... to brief anyone who will listen about what's going on.

I'll share the story, in full, on Tuesday, March 26 at 10 a.m. Eastern time. I hope you'll join me... Click here to reserve your spot for free.