Hey folks, I want to let you in on a secret for success in long-term investing...
Ignore the news! Close all financial media outlets, unsubscribe and move on.
It's counter-intuitive, but it works. Around here, we focus on great businesses that are well-managed and operate in a rapidly growing market. A well-managed company does not turn into a slow-moving dinosaur in one night, neither does a rapidly growing market become a snail based on one news.
Why do I say that?
Remember the times when everyone was scared of Netflix? Actually, there is still a big crowd out there that talks about Netflix doomsday. This past week, Netflix surpassed Disney in market cap, at least for a few hours. You could have sold Netflix when it was less than $100. You could have sold it when Disney announced it is going to introduce its own streaming services. You can still read the news that Netflix is an overpriced bubble ready to burst.
But, the reality is that Netflix is a very well-managed company in a rapidly growing market. Even the high amount of debt it carries is a well-thought driver of growth. It's not just the cash the company used to buy back its shares (unlike many others), and it is not the money it poured into real-estate. It's money the company has promised to the provider of its content in the future. And, the company has proved that more content means higher engagement. As far as Netflix goes, the ups and downs in the stock price are expected, but you can ignore the media and let this well-managed company do its thing.
We all do it. Not just for Netflix, but for every well-managed company that grows. Deep in the dark corners of our investing mind, we are all most likely articulating the reasons to sell our best-performing shares. Don't believe me?