Strong companies with good results

We always tell you that time will be on your side if you invest in a strong company with good leadership. In a market crash, all share prices drop but the stronger companies will prove that they can produce solid returns and will therefore bounce back faster than the weaker companies can. We saw this recently in the case of companies such as MTN, Bidcorp, Advitech and Italtile. In the States we saw great results from Disney, Amazon and Apple. Equity markets also took comfort from the fact that the latest inflation numbers in the USA came in lower that expected and we saw a lot of green on the trading screens.

If you listen to market commentators you will always hear that some are positive and some are negative. People take the same set of facts and form completely different opinions about the outcome, providing us with a base from which we can invest. It must be said that these opinions are usually based on shorter-term data and are thus more useful for shorter-term traders than longer-term investors.

For us as longer-term investors, these opinions can provide a favourable entry point but we have to delve deeper than merely short-term data points in order to make our decisions about investments. The most important consideration for a longer-term investor must be the potential of any investment and that is why patience is a virtue in our business.

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