Holding through cycles

Note 06

Markets move in cycles, and every cycle comes with a chorus instructing owners to do something about it. This closing note sets out how a long-term holder should listen to that chorus — and almost never obey it.

To a trader, a cycle is an opportunity with a deadline. To a long-term owner, a cycle is weather: real, occasionally severe, and not a plan. The skill of holding is telling apart information that should change what you do from information that merely changes how you feel.

What history asks of a private owner is stable: endure without becoming a forced seller, resist the urgency of "opportunities", and keep the file current anyway. We cannot predict cycles, so we own nothing that requires us to.

Our holdings are structured so that being wrong about the market is survivable — and being right is not necessary. The owner's calendar has one programme: records reconciled, obligations met, holdings reviewed, each answered in writing.