Optimism, Resilience and Opportunity

“There is no such thing as a rich pessimist” — Max Warburg

Every once in a while we come across a saying that strike us as noteworthy.  We are used to them from the likes of Warren Buffett or Charlie Munger but we all think of them from time to time. 

That is why we were pleased to see one our own picked up in a World Street Journal column by James Mackintosh, the senior markets columnist, a critical writer about markets, valuations and the ability of to generate returns.  In a piece entitled Here’s an Argument That Stocks Should Be Even Higher he quoted us with one of our favourites, which you have heard us say many times: “Every day that goes by is another missed opportunity to buy Nestlé.”

Our saying is borne out by Nestlé’s returns of 14% p.a. in CHF since 1982 and our optimism that its prospects for future value generation are as strong as its past. You can read the column by following the link here.

This optimism is founded in our long-term investment approach, which helps to put the current challenges in perspective.  It was in a conversation about those challenges that we heard our friend Max Warburg’s saying we quote above with his permission.  It struck a chord with us because it is a way of saying what we think about investing. 

Our world, not just our economies or our financial markets, is driven by the private initiative of people, whether they set up companies, develop new technologies, research new drugs, build schools or create art.  Each of those acts is an expression of optimism, and while not every effort, is a success as a whole these initiatives create progress and prosperity.  Pessimism doesn’t pay, something Warren and Charlie know better than anyone.

The onset of Covid-19 around the globe has changed the way we live significantly and could have long-term repercussions for how our economies function going forward.  Exactly what the post-Covid-19 landscape looks like is not yet clear, especially with the possibility of a second wave of infections around the world and the uncertainty of getting a vaccine.

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