Chairmans letter Q2 2022: THE BINGO HALL

It is natural for the stock market to rise and fall. This shouldn't stop you from investing.




July 1, 2022

Successful investors make the bulk of their money when they buy — usually when the majority are losing their minds worrying about BREAKING NEWS and PLUNGING STOCK MARKET headlines. 

Breaking News: the stock market has ‘plunged’ for various reasons. The Boogeyman lives! 

Have you ever had a bad day, and, out of frustration, you’ve said or done something that you KNEW was going to hurt you and you did it anyway? And it hurt you! Well now is one of those times. For your financial and mental health, turn off the news. It's not good. It usually is not good, but right now it’s particularly dangerous to inhale its noxious gas. 


We are likely in recession. There! It's been said. The boogeyman is alive — no longer under your bed but rather cuddled up beside you. He/she was born in January. He/she is six months old. ‘It’ has likely expired or soon will be.  

The Boogeyman is real. So, what comes next? 


The investing intelligentsia, media celebrities, economists, politicians, and your friends will debate if we are in recession or not (let's just say ‘yes’ and move on?) when interest rates stop rising because of the pending doom, and any and all other top headline concerns. Brokers will throw in the towel with great confidence and proclaim that business earnings will fail to meet their projections from last month. These groups of people, I label as ‘bingo callers’. Our advice is don’t play bingo. It is gambling and you will lose more often than not.  



Stocks markets may fall further as nervous investors, encouraged by the above-mentioned bingo callers, continue to be enthusiastic sellers in the bingo hall. The sellers are playing bingo, the owners of the bingo hall and their friends - the investor class - are just staying at home collecting the gamblers’ money and calling the numbers. That. Is. A. Fact. 

That is likely a fairly solid forecast for your favourite nighttime news update for the next 6 months. Do yourself a favour and take the next 6 months off, because by the time these ‘players’ exhaust themselves of bad news, it will likely already be getting better.  



While there are many problems, there are as many positives; human history is a continuum of swings between fear and greed. Right now, we are in a pretty heavy period of fear. Measures of pessimism are as bad as the global collapse of 2009 and worse than in March of 2020 when we were contemplating the end of the world. We think people are a bit carried away at the dancing of the bears, but it is a party, so there are always the late arrivals and those who have consumed too much.  

Stock markets are down in excess of 20%. Many well-respected companies' valuations have fallen 30-40%. Stocks are cheap(er). People are terrified of the present.  This is when you know that future returns are going to be good. 

Could things get worse? 

Sure, they could but it will not last. It never does. When gamblers have all left the hall the only ones left are those that think like the owners of the hall. They are the ones who end up owning all the chips. 

This is the time to double down. This is the time to put money into the ownership of great companies. 

When markets go into turmoil and fall. When your portfolio is down. When you are not wanting to look at your portfolio because it makes you sad. You know you are not alone. 

Just a few years ago we were told that the solutions to our global problems were likely a few years away. Look how wrong the common wisdom was at that time. There is no reason to believe this time is any different.  

Now is the time to be investing. Now is the time to buy.