Looking for the bottom
Apr 10, 2020
"Where's the bottom?" This is the most common question we've gotten from Titan investors in recent weeks.
Should you wait for the market to bottom before buying more? No. To explain why, let's use another investing situation: buying a home.
Suppose you've been shopping for a house. You find an extremely high-quality one. It's in a safe, clean neighborhood with great schools and friendly families. But due to coronavirus, many people aren't buying new homes, so your real estate broker offers you a price at a 30% discount to a few months ago.
Would you risk the deal going away to try to nitpick an even lower price? Heck no. You'd pounce at the chance to own your dream home at that steep discount. You know it's worth much more.
Why should stock investing be any different? It's not. To us, the Titan Flagship companies are 20 high-quality homes in an excellent neighborhood being offered at a 30% discount.
In both homes and stocks, you're a long-term owner of a productive asset that you believe is priced well below its true worth. When you find a deal, grab it.
With that said, it's entirely plausible that markets may fall lower in the coming months. Plenty of risks remain, hence we may not have bottomed.
Regardless, if our Flagship stocks' long-run earnings power remains intact (as we believe it does), and if they trade at discounts to intrinsic value (as we think they do), we'd advise buying even more. Even if the S&P falls again.
Warren Buffett, the great contrarian, is famous for saying he likes hamburgers, and when hamburgers go on sale, he eats more hamburgers.
It's funny how most investors behave the exact opposite with their capital.
Cash Management
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