When Market Noise Breeds Opportunity

When Market Noise Breeds Opportunity by Joe Weidenburner, Aeternitas Investing

Much of the day to day market action is noise.  Graham’s Mr. Market is an anxious fellow who frequently offers market quotations in strong businesses that are disconnected from the true per share business value of the enterprises.  Long-term investors are best served by avoiding each day’s tick by tick action and instead focusing on the economics and structural advantages of the companies they own or follow.

Sometimes, however, the daily noise in the market provides opportunity to purchase initial or increased stakes in best of breed businesses.  I find that volatile market action, particularly after long runs in market price, provides the patient investor with opportunity.  We are...