Timing the market is a mug’s game.

This week, I spoke to an “investor” friend of mine who had supposedly made several “long-term” investments earlier this year. However, as soon as the war started, he liquidated most of those “long-term” investments, telling me that he thinks this war will be a disaster that sinks the world economy. He even bought puts to double down on the thesis. I obviously have no idea how the Iran war will play out. It may conclude this Monday, or it may drag on for another year. And obviously, if it is the latter scenario, stocks are likely to suffer, and my friend may be vindicated. I, on the other hand, have followed a different strategy. I have been using the relative weakness in certain sectors since late February to add to my long-term positions, several of which have lost value during this conflict. These are investments I made after exhaustive research many quarters ago, and I intend to hold them into the 2030s. All my portfolio companies have rock-solid balance sheets, mostly no debt, and I can see them weathering a severe recession without long-term damage. Of course, these stocks will likely suffer if my friend’s thesis plays out. Nonetheless, I do not intend to trade out of them because I have a deeper conviction in their long-term future than in my ability to predict how long the war will last or how the market will react. Today, I am 47. I bought my first stock when I was 17, 30 years ago. Over those years, I have tried to time the market many times. At times, I was right and made a bundle; at other times, I was wrong and missed out on massive gains. On balance, when I look back, I believe the best trade, or investment, I could have made was to stick to my high-conviction positions, as I would have earned much more over the last three decades and spared myself the stress and agony of trying to time the market. Buffett, the most successful investor of all time, has always argued that he buys companies with the intention of holding them forever. There is indeed much wisdom in this. Holding the likes of Microsoft, Apple, Google, and Amazon through the cycle would have been far more rewarding than trading around them. The same applies to many non-tech names like Lotus Bakeries, which has returned 15,000% since 2000, or Games Workshop, which has returned 14,000% since 1994. In the end, long-term investing is not about predicting every shock correctly. It is about owning strong businesses, tuning out the noise, and letting time do the heavy lifting.