Mr. Market – Dancing on the ceiling? – About uncertainty & investing!
“What is happening here
Something's going on that's not quite clear
Somebody turn on the lights
We're gonna have a party
It's starting tonight
Oh, what a feeling
When we're dancing on the ceiling”.
So, is Mr. Market dancing on the ceiling, like Lionel Richie? Not quite! Even though, according to my methodology, half of our corporates have reached and surpassed their intrinsic value, we still have 10 companies trading below, a few of which are much below that value.
I want to stress that I’m not trying to be enigmatic here, nor am I warning you, but simply laying out some facts in front of you.
“Investors don’t like uncertainty”, I hear all the time, and yet it is the most fundamental & enduring condition of the investing world. It always has been, and always will be. At its heart, investing and uncertainty are synonyms. To be an investor, you must be a believer in a better tomorrow.
Investing is a journey, an adventure. Ben Graham, the Father of Value Investing, used to relish the scene in Dante’s Inferno where Ulysses describes how he inspired his crew to sail westward into the unknown waters beyond the Pillars of Hercules:
'O brothers, who amid a hundred thousand
Perils,' I said, ' have come unto the West,
To this so inconsiderable vigil
Which is remaining of your senses still
Be ye unwilling to deny the knowledge,
Following the sun, of the unpeopled world.
Consider ye the seed from which ye sprang;
Ye were not made to live like unto brutes,
But for pursuit of virtue and of knowledge.'
So eager did I render my companions,
With this brief exhortation, for the voyage,
That then I hardly could have held them back.
And having turned our stern unto the morning,
We of the oars made wings for our mad flight,
Evermore gaining on the larboard side.
Dante Alighieri, The Inferno, Canto XXVI, lines 112-126.
The fact of the matter is that it is certain that whether you sail to the Pillars of Hercules or beyond, sailing is uncertain.