Most failure comes not from knowing what to do but from not being able to go through the discomfort in the present to create success in the future. In the stock market and in life, fear is a great enemy. Fear maybe will not destroy you, but it will shrink your life into a small fraction of your potential.
We are in a bear market. Stocks go down many times way more than their future values. But how do we handle fear? First, it's okay to be afraid. It's painful. Just don't act on it. Hang in there. The stock market goes up 75% of the time. Being an optimist is not stupid. It's realistic. I have a checklist.
Investing Beyond The Noise podcasts
Van Clemens & Co. Bear market investing checklist
One, are you diversified?
Number two, the companies you're invested in do they have strong balance sheets?
Three, are they profitable?
Four, are they undervalued? Are they less than one times book value, less than one time sales, less than 10 times earnings?
Five, are the companies leaders in their industries?
Six, are the markets they are in growing?
Seventh, are the insiders buying their own stock? Just because the stock goes way down does not mean it's a bad stock. Just because the stock goes way up does not mean it's a good stock. Don't focus on stock prices, focus on the quality of the business.
Tim Clarkson's 2022 biggest stock winner is...
Cheaper stock is actually less risky, not more risky. Train yourself to be a buyer in bear markets, not a seller. As an illustration, CVR Partners, a fertilizer stock, had dropped from $250 to $6.
I had started buying it at about $100, and I kept buying it down to $6. It's back to $130. It's my biggest winner this year. It was part of a diversified portfolio. It was undervalued. The president of the company was buying it. I was guessing that the price of corn would rebound after an eight-year bear market. And then it did. The Russians invaded Ukraine and made the US the last place in the world where fertilizer can be made at a profit. Now that was a lucky break. Remember, success comes from walking through fear, not running from it.
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