Investing in Uncertainty and Resilience

Travis Hoium
04-10

The history of the United States and the reason it’s the best place to invest capital is the ingenuity and entrepreneurial spirit of the American people.

We move fast and break things. Sometimes that’s good. Sometimes, it’s not. But I have no doubt we as a society will thrive no matter what is thrown our way.

When the Great Financial Crisis hit, I was an engineer at $3M(MMM)$ , and now I have a YouTube channel and a newsletter. You may have a similar story of adaptation or evolving with the world.

I see this as a time to adapt to the new rules of the game, and I want to invest in companies that can thrive in the new environment.

There’s uncertainty, which the market hates, but that generally gives us better prices for assets.

This uncertainty also puts more focus on the investments we make and who will thrive and who will die. I want companies with:

  • Positive net cash

    • 16/20 stocks in the Asymmetric Portfolio have positive net cash

  • Positive free cash flow/earnings

    • 16/20 stocks in the Asymmetric Portfolio have positive free cash flow

  • Resonable valuations

    • 5/20 stocks have a P/E under 20x

    • 18/20 stocks have a P/S multiple under 7x

If I get all three, it limits my downside, and it gives the companies I own a chance to not only survive but thrive with whatever comes next.

I’m betting on the resistance of the American economy and entrepreneurs to overcome tariffs or whatever comes next. I don’t know what they’ll create or what the companies I own will look like a decade from now, but I think I’m positioned for success no matter the hurdles.

In the last 100 years, the market has survived a world war, oil crisis, pandemic, and financial crisis, and that’s just a short list of uncertainties investors had to deal with.

This is different because it’s self-inflicted.

But the U.S. economy will survive and eventually thrive. I’m happy to buy stocks at a discount as the market waits through the uncertainty.

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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