WCAM - Do Investors Have the Stomach for Post-Modern Volatility?

Investors love and tend to reward predictable businesses, which is one reason blue chip stocks are considered blue chip stocks.We distinguish business predictability from market volatility, and as we explain in The Entrepreneurial Investor ( John Wiley & Sons, 2007), we like volatility because it affords opportunities to buy stock at a discount and sell at a premium. But it takes a clear mind and a strong stomach to ride out the kind of stock price motion sickness produced in 2007.

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Book: The Entrepreneurial Investor: The Art, Science, and Business of Value Investing