Lastly, Mama would remind us to find contentious, quality companies and hold them for a long time, because “there will be days like this.” She would also remind investors that glamour, high-PE stocks break badly when the momentum dies. As any good Mama would do, she’d tell us “don’t worry” and stick to our three core tenets– valuation matters dearly, hold businesses for a long time and stick to high-quality companies.
William Smead is CEO and chief investment officer at Smead Capital Management.