Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
A cluster of holdings expected to make $1bn a year in profits suddenly switched to an outlook of very likely bankruptcy...
Yet Mr Market was still offering not-that-bad prices, like a reverse margin of safety.
It's a simple Rule #1 decision to sell...
[i]t just doesn't ever make sense to own any business with that big a downside relative to current price.


This emergency brings to mind that the prospects of any business, industry, sector or economy depends upon its macroscopic milieu. Yet in normal times value investors, including myself, typically tend to eschew the macrosphere, on the historically justifiable trust that, for individual businesses, everything tends to work out over the long term based upon their fundamentals. Many take this to justify rarely looking in on their carefully chosen stock holdings.

This time is indeed different. Macroscopic affairs are occasionally, albeit rarely, overwhelmingly influential vis-a-vis even the most robust of companies.

Tom
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.