hebel. today · 14 November 202625 / 80
Money · Investing
Why you should stop renting tickers and start owning businesses
Investors often confuse the high-frequency churn of modern markets with the deliberate pace of business ownership. While the average stock holding period on the New York Stock Exchange fell from over eight years in…
From 5 newsletters · 1 min read · one thing to try
Investors often confuse the high-frequency churn of modern markets with the deliberate pace of business ownership. While the average stock holding period on the New York Stock Exchange fell from over eight years in 1960 to just five and a half months by mid-2020, this shift reflects the behavior of high-frequency trading firms rather than long-term capital allocation (Grow or Die). Ben Graham suggests that while the market functions as a voting machine in the short run, it acts as a weighing machine over time, measuring the growth of sales and profits.
Waiting for a clear market uptrend often forces investors to miss the most significant recovery days, which J.P. Morgan found tend to cluster within two weeks of the market's worst sessions (Grow or Die). For instance, the S&P 500 dropped 34% during the 2020 COVID lockdown, but an investor who stayed in the market would have seen a 9% gain the day after the March 23 bottom, reaching a record high by August. Alphabet, Vertiv Holdings, and SK Hynix reported substantial revenue growth and record backlogs during the same period of recent market volatility, confirming that underlying business fundamentals often diverge from short-term price swings.
Maintaining a long-term perspective requires ignoring the noise of daily volatility, as exemplified by the 100-year-old Ida, who built her wealth by investing in the stock market and leaving it alone despite the temptation of lifestyle creep (Robin Levine Shobin from Charlotte's Book, Robin Levine Shobin from Charlotte's Book). As the issue on Friday showed, protecting the downside remains essential, and investors can use a tiered pricing system—noting interesting, accelerating, and hard-hit prices—to act as a compass when the market fluctuates (French Hidden Champions).
- A 3x leveraged semiconductor ETF attracted $5.1 billion in inflows last week, signaling that retail investors remain active despite recent sector-specific declines (ARB Letter).
- The S&P 500 has finished higher 12 months after every midterm election since 1946, yielding an average gain of 14.8% (BitFinance with Matthew Snider).
Try today · 30 min
Create a 'Bargain Price' ledger for your three largest holdings.
Identify three price levels for each stock: one where you find it interesting, one where you accelerate buying, and one where you hit it hard.
You need
- Portfolio list
- Current stock prices
- Spreadsheet or notebook
Steps
- List your three largest stock positions.
- Research the historical valuation range for each company.
- Define your 'interesting' price point based on historical support.
- Define your 'accelerate' price point for a 10-15% discount.
- Define your 'hit hard' price point for a significant valuation correction.
- Save this document as a reference for future volatility.