- Throughout market history, investors repeatedly abandon the principles of value investing and maintaining a "margin of safety" during periods of exuberance. Ultimately, those investors paid a dear price for their speculation.
- In a market that is overvalued on many metrics, finding value becomes difficult. Furthermore, holding value when it is underperforming the "hot stocks" in the market is even more challenging.
- When investing, we seek to deploy capital in an operation with potential to deliver a high return on that investment. Therefore, logically, if no such opportunity with the required "margin of safety" exists, then the best operation is to "do nothing."
For further details see:
Value, Margin Of Safety, And The Art Of Doing Nothing