We come to the end of another unusual financial year.

Over the years we have encouraged investors to avoid predicting markets, and understand the shares they own are real, operating businesses. Commensurately, the long-term success of the investment will be predicated on the success of the underlying business. In the short-term the success of the investment will have almost nothing to do with the underlying success of the business but will be more strongly correlated with short-term movements in equity markets. As the father of value investing, Benjamin Graham, quipped, “in the short run, the market is a voting machine but in the long run it is a weighing machine”.

The last 24 months have highlighted the futility in predicting markets. Unfortunately, those self-managed investors who predicted dire share markets during covid and sold their businesses (shares) are now sitting on cash, torn about whether to re-enter and anchored with hope that prices retreat so they can re-enter the market.

To these people, our advice is to focus on what you can do today. Look at your cash as a fresh canvas and scour the market for some great businesses to purchase. If none are to your liking, then you are not forced to purchase.

To those who engage Leyland to manage their funds, they have no-such worry. They have held their businesses through the ups and downs.
The art of long-term investing involves not only the ability to understand businesses, but also the ability to appreciate the human condition. Some call this behavioural finance, and this should not be ignored if one is to be a successful investor.

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