There are a lot of problems here and around the world that make FMT Advisory ecstatic. While we naturally hope the best for all of humanity, as investors, we know that you don’t get great prices with a cheery consensus. So when there is a huge negative feedback loop in various investment areas we find it exhilarating, frankly.
We can only build a collection of stellar assets with serious rocket fuel behind them when they are available at substantial discounts to our conservative estimates of intrinsic value, which is what provides the energy our portfolio empires need over time. In other words, it is hard to find value and add wonderful pieces to our portfolio empires without fear and negativity. To that end, we embrace volatility, fear, and negativity while we loathe optimism and excitement in markets.
While it goes against human nature, FMT Advisory is resolute in adding rocket fuel to our portfolio empires by adding to great assets as they decline in price, as our holding’s intrinsic values are nearly certain to grow. In our experience, this is where serious wealth can be built and retained. In fact, nothing angers us more than a holding we own going up in price when we’d rather be adding it to our portfolio empires for serious long-term rocket fuel.
The chart above illustrates our point. When you are given the opportunity to buy an investment at a substantial discount to its intrinsic value and that value (the dotted line) is increasing you’d be wise to take it, as your long-term returns increase substantially.
We know that it is normal for human emotion to want an investment to go up immediately after it is bought in publically traded markets. But, as noted, that will not necessarily help stellar long-term results unless you have an alternative asset that you can immediately reshuffle into that was just as cheap and great. But cheap and great are found far and wide and deferring taxes is a real advantage.
Therefore, after we buy, we prefer our assets to decline in price (so long as the intrinsic value is certain to grow), so we can add more fire power and more energy to our portfolio empires for future compounding.
Operating Against Conventional Wisdom
Again, we know this is against human emotion. As an example, our number one hit the fan business has increased its intrinsic value on average by 21% a year since its inception in 1985, and the stock has followed with a 19% annualized return. Nothing would be better for us if the price were to truly decline for awhile based on macro volatility. If you cannot buy wonderful businesses cheap, you shouldn't be investing or you should hire someone that can.
Imagine yours stocks kept going down, while the intrinsic values kept going up, and we kept buying them well under intrinsic value? This is the ideal set-up up for investors. This idealistic set-up becomes an absolute rocket ship for us as all the pent up energy ultimately gets released and sends our investment portfolio into the stratosphere.
Someone once said, "you make all your money in bear markets, you just don't know it."
So there you have it. FMT Advisory operates very differently than conventional wisdom or your average investor, and very contrary to human nature. By doing so, we expect unconventional results. If you are tired of your 1980s model portfolio, we welcome your inquires.
We are a fast growing company and still welcome new inquiries right here.
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