Between us, Chief Investment Strategist Alex Green and I have nearly 80 years of investing experience.
We’ve lasted this long because we share a similar investing approach…
We don’t look at stocks as lottery tickets.
So, Alex and I recently sat down to give the Real Talk on stocks, the markets and recent geopolitical events.
And over the next few days, I want to share our special conversation. You’ll like what we have to say.
You can check out part one of our series by clicking play below. And stay tuned for part two in tomorrow’s Real Talk!
Regards,
Founder, Alpha Investor
P.S. Alex recently shared his No. 1 approach to navigating the current market volatility. He even revealed the details of his top three stocks he believes investors need to own right now.
If you’re looking to boost your portfolio during the ups and downs of COVID-19, the Russia/Ukraine conflict and more, you’ll want to check out his presentation right here.
Transcript
Charles Mizrahi: One thing we both share is the way that we look at the marketplace.
We look at stocks as pieces of a business that have real earnings, CEOs behind them, customers, factories, plants — a whole bunch of things.
They’re not wiggles or jiggles on a chart. And that has made all the difference.
Alex Green: Right. Well, I’m so glad you said that, Charles. Because I talk to people, and they say: “What do you think the Federal Reserve is going to do [during] the next open market committee meeting? What do you think about the advance decline ratio in the oil sector? What do you think about…?”
They’re so far away from the fundamentals of what they should be thinking about.
If you were running a business yourself, would you be making decisions about whether to expand, what to merge with or any other important decision based on what the Federal Reserve was going to do at the next meeting? It’s kind of silly.
And yet, because the cable channels are full of this stuff every day — full of it in every sense of the word — people start to think those are the sorts of things they should be thinking about when they make their investment decisions. And they really shouldn’t.
Charles: If you bought a private business — if you bought a coffee shop — would you say: “I’m not going to buy it until I hear what the unemployment numbers are. And if there’s a moving average crossover and an oscillator buy signal…”
It’s ridiculous.
But the benefit is that there are so few who do it like us. And the reason that we’ve been successful is simply because we’ve lasted a pretty long time. We’ve been doing this for close to 40 years each. And you don’t hear about too many people who can brag about that.
Alex: No, they get washed out one way or another. And we’re survivors.
Ultimate Uncertainty
Charles: Well, the thing is, Alex, it works.
If something works, and it’s not a get-rich-[quick] kind of thing… We don’t ever talk about stocks like they’re lottery tickets. We look at what they are.
And when you figure that out, it becomes a much easier way to invest than just trying to pick blips on a chart and say: “Buy here, sell here.”
Alex: Right. Listen, anybody who wants to get rich, I applaud them. I’m happy to help them. But if you want to get rich by Wednesday, it’s probably not going to happen.
Charles: The backdrop that we’re talking about is 2022. It’s a whole different backdrop than we had in 2021 — and even 2020, during COVID-19.
We’re watching Russia invade Ukraine. We’re seeing the tremendous agonies and troubles that they’re causing these people and the world’s response — or rather lack of response.
In addition to that, we’re seeing prices of commodities, oil, wheat and gold hit new highs.
Alex: Right. The old saying is that markets hate uncertainty. And armed conflict is the ultimate uncertainty.
Everyone’s wondering how bad it’s going to get, how many civilians are going to die, when they’re going to capture the capital or who’s going to run the country when the inevitable happens — unless some kind of peace gets brokered and a deal can be negotiated.
So, it has sort of put the world markets on edge — and understandably so. Because there are a lot of uncertainties out there right now.
Charles: If you look over the short term, it’s a problem for short-term traders. But for long-term investors — people who are looking over a long-term time horizon — the world’s your oyster.
The Luxury of Hindsight
Alex: Right. Well, if you’re a long-term investor, all you have to do is look at a 200-year chart of the stock market and say: “Where were the best buying opportunities? Right in this dip. Right in this crash. Right in this pullback, correction or bear market.”
And so, historically, we know that people will look back and say: “Wow, I wish I’d been buying something good back then.”
But sometimes, it’s tough to get people to realize that at the time.
Charles: Yeah, it’s only the good old days after you live through them.
When you’re living through them, it looks really terrible. And day to day, you’re watching all of the information come pouring at you like a fire hydrant.
But if you take a long-term perspective, these blips in the market are the buying opportunities that you just wait for.
Alex: Yeah. Well, the thing is, in the luxury of hindsight, they are blips. But when you’re living through them…
Back in my former life in the money management business, I was astounded that the same clients who panicked and sold in the crash of 1987 were the ones who panicked and sold during Tiananmen Square in 1989 and when Saddam went into Kuwait in 1990.
[It happened] again and again. And each time, it was something completely new: “I never figured this would happen.”
Who figured 9/11 would happen? Who figured that a global pandemic would happen? Who came into 2022 thinking that Putin was going to go into Ukraine? Nobody.
I don’t mean to make light of the fact that there are serious and often very scary events that cause these so-called blips.
But the important thing to bear in mind is that businesses will go on.
Businesses exist to meet all of people’s wants and needs — the ones that can’t be provided by the government, anyway — like defense, interstate highways and so forth.
So, growing, profitable businesses are going to see their share prices appreciate over time. And as an investor, you want to share in that growth.
To me, all this macroeconomic and geopolitical stuff — and all the Fed-watching — is white noise. [It’s] a distraction.