The stock (market) doesn't care about you

We hate to break it to you...

Dear TDI reader,

Is this the perfect moment to tell you that we care about you? Probably as good as any. Since we care deeply about writing insightful articles for you, we also care about the people who read them. Which happens to be you. 

But there's also someone who doesn’t care about you. Now, before you start kicking chairs or pounding your desk, relax; it’s Mr. Market. I’m sure you already know this, but let’s put things into perspective:

Last week, we shared that our biggest position, when combining all four of our portfolios, is Amazon. In that post, you saw that each of us bought Amazon shares at four different times over the past five years.

I'm grateful that the four of us have each other, which means we don’t really experience the emotions described below. But even though this is fictional, we’re all emotional beings, so these thoughts about our investment decisions wouldn’t be entirely unrealistic:

Luuk: “I’ve held Amazon for almost four years and only made a 28% return. This just isn’t working.”

Bouke & Mathijs: “If we sell now, we’re looking at an 80% return. Amazon is probably overvalued, so selling wouldn’t be a bad move. No one ever went broke taking profits.”

Siem: “I want to add to my position, but then my average purchase price will be higher. Maybe I should just wait.”

The only issue? These thoughts are irrational.

The only thing that matters when looking at our Amazon position today is: what is Amazon’s current business outlook, and does it seem like a good investment in the coming years based on its valuation?

The takeaway here is to approach every stock in your portfolio as if you were deciding to buy it again today. A tip: 99 times out of 100, the best choice is to do nothing.

So, instead of fixating on your purchase price, focus on identifying and researching quality businesses. Since we already help 50 other serious investors do this every week, we’d love to help you as well. » Discover TDI-Premium

That’s all for today! We look forward to seeing you again this Friday. For our TDI-Premium members, ASML Part 1 will be published.

Here on Substack, we’ll explain why no company on earth can compete with ASML.

Have a wonderful day and happy investing.

The Dutch Investors