Patience: The Gullane Way

Trip Family Picture“Patience is bitter, but its fruit is sweet.” — Jean-Jacques Rousseau

A few weeks ago – July 8 to be exact – the New York Stock Exchange abruptly shut down at 11:32 AM, local time, and did not resume trading until3:10 PM. This unprecedented outage was, according to NYSE president Thomas Farley, caused by a technical “configuration problem” that was “fixed”.

The disruption attracted the attention of U.S. Homeland Security - secretary Jeh Johnson felt compelled to announce there was no indication the outage was linked to “nefarious” actors or a cyberattack, but law enforcement, SEC and Treasury officials would remain in close communication with Wall Street nonetheless.  A measure of panic enveloped Wall Street and Main Street market-watchers as the situation unfolded.

I was focused on reading an annual report when I was alerted to the outage by a member of the Gullane team. While the events served as a curiosity, our business was uninterrupted – I returned to the business of researching investment opportunities. Throughout the day, however, I received calls and questions from friends and professional peers asking for my assessment of the “situation”. Frankly, they seemed a bit overly concerned.

At Gullane Capital Partners we have a long-term investment perspective.  I was confident that, whatever the cause of the market outage, it would not affect the values of the wonderful businesses we own. Occurrences like this “configuration problem” represent what we consider “noise”. It is irrelevant to long-term investment success and serves as a distraction from more important issues for many investors. Many investors and investment advisors suffer from a “configuration problem” – they configure their portfolios based on noise rather than long-term substance. By year end this event will probably be a distant memory and at best a tiny footnote in market history. Savvy value investors will wisely recall Warren Buffett’s statement, “I don’t want to buy any stock where if they close the NYSE tomorrow for five years I won’t be happy owning it”.

At Gullane Capital Partners we think about preserving and compounding capital with a five year or greater time perspective. This allows us to arbitrage time by allowing great businesses to flourish while we ignore the short term noise. If you’d like to learn more about how Gullane can help you achieve your investment goals, please give me a call at (901) 766-1969.

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