What Does It Mean To Win Through a Downturn?

[Robert C.]

Hopefully some experienced folks can weigh in here. I’ve been wondering what you think it actually means to have done well during and after a market downturn?

People love to have bragging rights after the fact because they “called the crash”. At the same time there are lots of people here who have never been through a full cycle yet. What makes you look at another investor after a downturn and say “yeah, they did it the right way, I want to be them”?

I think it’s too easy to just pick out the people who saw it coming and sell everything. I wonder if 1.) That actually means you outperform people who ride it out. 2.) Or if that’s more about keeping a “perfect” record to show off to investors. 3.) Maybe it’s as much luck as skill. 

What about just capital preservation and not losing money? Is that good enough?

Not everyone is going to have a pile of cash on the sidelines just waiting to be deployed at the right moment. And even that may not be optimal. 

What’s your perspective while we wait to see if another bank gets bailed out?