“In Investing, Comfort is the enemy of performance.

If you make an investment and you feel really good about it, you will likely make very little or even lose money.

If you make an investment and feel sick to your stomach, you will likely make money, perhaps a lot of money.” – Mark Yusko

Being a contrarian in investing can be tough, and the difficult part is it is never quite clear if being a contrarian about a stock is right or wrong, until enough time has passed. I find that the more worried and concerned I am about buying a stock, typically, the better the decision it has been to buy. It is when I am excited about buying a stock, or the decision seems too easy or comfortable, that I have to second guess myself. The reasons to this are fairly logical, when a good, high-quality stock has dropped by a lot, it can be nerve-wracking to buy at that point, as many thoughts may be going through one’s head – ‘did I miss something’, ‘is there more downside left’, ‘has the narrative changed’. But, usually in hindsight it has been a good buying opportunity, and it is important to battle through the emotions following a large price decline, and ‘buy the fear’.  

 “A lot of financial debates are just people with different time horizons talking over each other” – Morgan Housel

Context is everything. Understanding the timeframe that another investor has is crucial to understanding their viewpoint on a specific stock. Maybe that investor is only looking out three months into the future, and so their view on a stock is bearish, while one’s own view is long-term, and looks at a five-year timeframe. Another reason that I really like this quote, is because over a long period of time, the financial markets have trended up and to the right, and so when taking a long-term timeframe in mind, most investors would agree that buying today might make sense, however, as those timeframes are shortened, the waters become muddier.

 Unlock the Power of Informed Investing with 5i Research!

DIY investing doesn't have to mean going it alone. At 5i Research, we're your trusted partner in navigating the stock market. Our platform offers comprehensive stock and market research, empowering you to make smart investment decisions. 

• Investor Q&A: Have burning questions? Get answers from our team of experts and fellow investors in our dedicated Q&A section.
• Research Reports: With over 60 meticulously researched Canadian stocks, our reports offer in-depth analysis, giving you the confidence to invest wisely. 
• Model Portfolios, Alerts, Forums, Portfolio Tracking, and Much More...

“Being too far ahead of your time is indistinguishable from being wrong" – Howard Marks

This quote goes back to being a contrarian. I often like buying certain stocks when everything is boring, and the stock has not moved for a while. This can present sideways action, but if the fundamentals are strong and growing, and valuation is becoming cheaper, I find that these opportunities can represent healthy consolidation, and eventually a move higher can occur. This can appear as being indistinguishable from being wrong, but I often view it as being early.  

 “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” – Warren Buffett

Volatility is an investor’s best friend. Market drawdowns have historically been a good buying opportunity, and after a certain amount of time, broad-based fear can be easy to spot, and buying this fear can lead to high returns.

“Sometimes you're flush and sometimes you're bust, and when you're up, it's never as good as it seems, and when you're down, you never think you'll be up again, but life goes on.” – Fred Jung

This is one of my favourite non-investing quotes that I relate to the markets. The emotional joy of making money in the markets is never as extreme as the emotional pain of losing money in the markets. But the key is understanding that the financial markets are inherently cyclical, and it is all a part of the natural ebb and flow of money. To this end, I try to enjoy the purchases I made at lower prices, and I am grateful for the opportunity to buy at lower prices.

Research for Today, Invest for Tomorrow.

Twitter: @5iChris