Yesterday the headlines did their job. They scared people.
The Nasdaq dropped more than two percent. The chip names came apart... Micron down thirteen, Qualcomm down eight, AMD off nearly six. South Korea's market fell ten percent overnight and the worry crossed the ocean by the time we opened here. By the close, the financial press had reached for the word it always reaches for on days like this. Selloff.
Here is what was not in the headlines.
The Dow finished almost exactly where it started.
IBM rose close to five percent.
Merck and Johnson & Johnson were both up better than three.
The damage was concentrated in the most crowded corner of the market... the AI and semiconductor names that had run up triple digits and are priced for a future that has to arrive right on schedule.
The boring, durable businesses that pay you to wait held their ground. Some of them gained.
I bought yesterday.
I want to be honest about something, because it matters.
Buying into a falling market is the hardest thing I do in this business.
Every instinct you have tells you to wait, to see the bottom first, to let it settle down. I have felt that exact pull for thirty years. I felt it in 2002. In 2008. In March of 2020, when it genuinely looked like the world was coming apart.
In the long rate-driven slide of 2022. I bought into every one of those, slowly and deliberately, and not once have I looked back five years later and wished I had sat on my hands.
The discomfort you feel on a red day is the price of admission. The people who build real wealth in markets are not the ones who manage to avoid the fear. They are the ones who act anyway.
But there is a discipline to this, and I would be doing you a disservice if I gave you the encouragement without the method.
You do not back up the truck.
You go in slow. You buy in pieces, across days and weeks, because nobody rings a bell at the bottom, and anyone who claims they can call it for you is selling you something.
And you do not buy what fell the most simply because it fell. You buy quality.
The businesses you would be comfortable owning if the market closed for five years and you had no way to check the price. Real earnings. A real moat. Products people will still need a decade from now.
The kind of company you would not think twice about passing down to your children.
A day like yesterday does not destroy businesses like that. It just puts them on sale for a little while.
The only trick, and it is the hardest one to learn, is having the stomach to walk into the store while everyone else is running out of it.
I will be adding slowly over the next few weeks. Carefully, and only to the names I would be glad to hold for the long haul.
-Greg
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