To master the third principle of long-term thinking and resilience, we must study and learn from history. 

 

In the last century, the stock market endured the Great Depression, two world wars, multiple pandemics, the 2000 tech bubble, and the 2008 housing crisis, among others. In the short run, Mr. Market will set stock prices, but in the long run, the return at which the company compounds its profits will set the price of the stock. In our view, this discrepancy between the short and long-term creates an opportunity for us to realize attractive returns for our investors.

 

Sitting and doing nothing is counter-intuitive to human nature. We are engineered to act. However, when we spend our time finding wonderful companies that can compound our capital over decades, why should we interrupt that process for the sake of activity? We would go as far as to say that more action on our part implies that we need to do our job better.

 

The act of inactivity shouldn't be confused with complacency, however. We recognize that times change, cycles come and go and we must gain wisdom through time and evolve while maintaining the principles that keep us disciplined. This intellectual journey of constant learning is what helped Warren Buffett beat the market even in his 90s, and we shall emulate that trait.