This has become a market where avoidance is the best strategy. That's the essence of the current market environment, in fact. The more selective you are, the more chance you have of actually outperforming. The more you attempt to pick, probe and think, in any form whatsoever, the more chance you have of creating or compounding a loss.
Sloppy markets make avoidance an actual strategy. Wall Street will never tell you this because investors doing absolutely nothing creates no revenue and no liquidity for the markets. If you're not creating revenue or liquidity by trading, then you are useless.
I have attempted a couple of new long investments in the past few months and had to cut both loose a short time later because the weakness in equities is so blatantly profound and well defined that you have to play defense. Even with positions you are absolutely convinced with. If they aren't acting right, you have to let them go.
Over the past few weeks I have looked at all types of opportunities on the long side. Companies that I liked 30 or 40 percent higher have suddenly become downright cheap. In each and every circumstance, I have been thankful that my discipline in holding off until general market conditions improve has saved me valuable performance in a year that I can't afford any mistakes.
There is no reason to believe that this situation will change anytime soon. Simply because it's the end of the year doesn't mean the market HAS to rally. It doesn't. It can keep going down into year end, completely ignorant of how convinced everyone is that markets have to rally because its Christmas.
Until the market begins presenting definitive evidence that the positive attributes of avoidance have been replaced by the positive attributes of engagement, then it may be best to stick with what has been working.
Avoidance is a strategy. It just isn't talked about because it doesn't do anyone any good to present it to you as such.
_______________________________________________________________________________
From time to time, I email individual company research, commentary and excerpts from my monthly investor letter to those who are interested. If you would like to receive future emails, please write me at mail@T11Capital.com
Disclaimer
This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice.
This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website.
T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing.
Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future performance.
