Wally Weitz: Don’t Wait For The Robins

Johnny HopkinsWally WeitzLeave a Comment

In his latest article titled – Don’t Wait For The Robins, Wally Weitz explains how investors miss out on outsized returns by waiting for the market to turn. Here’s an excerpt from the article:

The bad news for corporate profits is likely to continue for a while, and the bear market may have further to run (drop). But after the selling has run its course — after desperate sellers stop accepting distress prices and buyers regain some courage — the bear market ends.

There is no way to predict with any certainty when this will happen, but the turn will probably not come because the news has turned positive — it will come before the coast is clear. As Warren Buffett said in late 2008, “If you wait for the robins, Spring will be over.”

Our companies have been going about their businesses, generating cash and growing their future earning power. They are taking market share at the expense of weaker competitors and buying productive assets from others that need the money.

It may seem counter-intuitive, but long-term growth in earning power and business value is very often enhanced by periods of adversity. Market drawdowns can be painful in the moment. But over the long history of the stock market, bears — even deep ones — have tended to disappear into the steady, upward-sloping pattern of long-term stock charts.

You can read the entire article here:

Wally Weitz – Don’t Wait For The Robins

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