When the Bubble Bursts: Happy Endings

Feb 2000

If we were to write a script for obtaining above average returns, it would begin with an opportunity to acquire excellent investments at fire sale prices—presumably because other investors were otherwise preoccupied.  Then, our script would call for the best bargains to gain recognition and to appreciate as investors refocused on the attractiveness of our investments.  (In reality, this script has been played out a number of times in the past, bringing rewards to patient and perceptive investors.)  The current investment environment looks as close to the bargain portion of this script as any I’ve seen in years.  The recognition and appreciation portion may await the bursting of today’s narrow market bubble, so it shouldn’t surprise anyone that we’re listening intently for a ‘pop.’