Hey 👋 – Thomas here.
Good day to my fellow compounders!
In 3-Bullet Sunday, I share with you the three most interesting piece of article, video or podcast I came across for the week on investing and growth philosophies.
Enjoy!
I. Bill Nygren Market Commentary | 2Q22
Stock price movement often drives sentiments.
When the market is up, investors feel that excess returns are likely to continue.
When the market is down, investors feel that it is time to be cautious.
But the opposite mindset is required to do well in investing.
Here’s what Bill Nygren has to share:
“What were equity returns immediately following bear markets? For the 11 previous bear markets, the median additional decline after the market was down 20% was another 10% loss. Despite those declines, two years from the time the market first hit down 20%, the median gain was 33%. That statistic is especially interesting because the two-year price increase from a random purchase date has been just over half as much, 17%. Perhaps the advisors who are now urging extra caution are being driven by their emotions rather than data.“
>> Click here to read Bill Nygren Market Commentary | 2Q22
II. The Worst 6 Months Ever For Financial Markets
Data presented by the author shows that the past 6 months have been probably the worst in both stocks and bonds.
It’s never fun to sit through declines like these… but for those in the accumulation phase, the author ends off with:
“I don’t know what the next 6 months or even 6 years will bring in the financial markets.
There could be more pain ahead or markets that go nowhere or who knows what else.
There’s no such thing as ‘always’ or ‘never’ when it comes to the markets but I feel strongly that investing in the midst of awful stock and bond returns will be a good idea over the long run.
Risk and reward are inextricably linked at the hip.
You cannot earn decent long-term returns without experiencing periods of excruciating losses from time to time.
The past 6 months were one of those times.
I for one am excited to be putting new money to work at much lower prices.“
>> Click here to read The Worst 6 Months Ever For Financial Markets
III. Lessons From Nick Sleep of Nomad Investment Partnership
Nick Sleep’s letters is one of my favorite.
It talked extensively about scaled economics shared, one of the most powerful mental models to apply when evaluating companies with a superior cost structure that comes with scale.
Check out my key takeaways in this article!
>> Click here to read Lessons From Nick Sleep of Nomad Investment Partnership
That’s all for this Sunday.
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See you again next week.
Cheers,
Thomas
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