To The Moon

Now some critics would say, 

"But Adam if you're so smart, why are you down? If you're so smart you could have seen the crash coming — you should have sold everything at the top, shorted the market at the top, and bought commodities — and now you wouldn't be down at all. You would be like up every year, every day, every month."

Well, it's because I don't have a crystal ball, and no one has a crystal ball.

So the reason why a lot of people fail in the markets is that they come in with unrealistic expectations, thinking that as a great investor, you can see the future — you know exactly where's the top, exactly where's the bottom. Most people fail because they come in with these naive expectations.

Hey even the greatest investor in the world — Warren Buffett — who's been investing for the last 80 years, his portfolio doesn't go up in a straight line. It goes down as well. In fact, he has seen his portfolio drop up to 50% more than 4 to 5 times in his career.

There's only one guy on Wall Street whose investment portfolio never goes down — it goes up every single year without fail, and has never dropped at all.

His name is Bernie Madoff.

He was found to be the greatest scammer and fraud on Wall Street because all his investments were fake. It was a huge Ponzi scheme, and he was sent to jail for 100 years and he died in jail.

So the point is this:

If anyone tells you that they can see the future, they can sell at the top, they can buy at the bottom, their portfolio always goes up, it's a freaking fraud, okay — it just doesn't exist. So if you think that way, grow up! Don't be so naive all right.

So like I said, I'm not fearful. I'm excited because I know that it's part of the journey.

It's kind of like marriage. You can't have a great marriage without arguing once in a while, and after every argument, that should strengthen your marriage. It's unrealistic to think that you're gonna have a marriage for like 50 years, never argue, stay happy every single day. . . yeah, try. Try that, go ahead, best of luck.

It's the same thing with a business.

In business, you can't always have sales. You've got to have sales, cost of goods sold, and that gives you profit. So I look at my portfolio the same way.

When my portfolio goes up, it's like sales, sales, sales, but I can't have sales all the time. I've got to have some costs once in a while before the next sale, and remember that the market is kind of like a breathing pattern right — breathe out, breathe in, breathe out, and breathe in.

No matter how strong you are you can't breathe out forever. It's impossible. You've got to breathe in once in a while before you can breathe out even further.

So the market is designed in a way that you have to take 1 step back in order to take 3 steps forward.

Sometimes you take 3 or 4 steps back like now, to take 8 steps forward.

So once you understand that that's how the market works you don't get upset, you don't get concerned during these drawdowns — you expect it, you anticipate it, you go with the process, and you enjoy the process.

I always say, 

"Enjoy the journey. It's not just the destination, it is the journey."

I tell people that if you buy a portfolio of great companies with underlying good businesses, and you buy them at reasonably good prices, you don't have to buy at the bottom. As long as you buy them when they're undervalued collectively, it is impossible to lose money.

It is impossible to lose money because eventually, they will go up again to new all-time highs.

The only way you can lose money is if you sell halfway at bottom prices because of fear — because you panic halfway. As long as you invest with money you don't need urgently, and you don't invest with borrowed money, there's no one forcing you to sell. You just hold it through those ups and downs.

The stock market is like a roller coaster. The only people who get hurt on the roller coaster are those that jump off the ride halfway. If you stay on the ride and enjoy the roller coaster you will reach the destination eventually.

May the markets be with you.