Dealing With Losses
We have a very large exposure in Property & Causualty insurance and reinsurance stocks. Needless to say, the last few days have not been kind.
In times like these, when your portfolio begins free-fall, I always remember a quote from one of the best investors of all time, Peter Lynch, “I’ve always said, the key organ here isn’t the brain, it’s the stomach. When things start to decline - there are bad headlines in the papers and on television - will you have the stomach for the market volatility and the broad-based pessimism that tends to come with it?”
I’m not going to pretend that losses don’t affect me, but I’ve learned to keep my finger off the trigger. The worst thing to do is to take risk but then sell as soon as the market turns against you. I’m still optimistic about the long-term prospects of the companies we own but days like today, test my confidence to the fullest.
