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Capital Market Review

  • Capital Market Review
  • January 2024
  • Iron Capital Advisors

Fourth Quarter 2024

Patience is a virtue.

Patience is a key ingredient to long-term investing success. This past year we have been recovering from the 2022 bear market, and it has been a frustratingly slow process. Things started off looking better, yet it was only seven stocks that were going up while everything else went nowhere or even down. The wind finally came back around, and we ended 2023 with a strong rally. We predicted this and were well positioned for it.

So, how do we know? Experience certainly helps, but there are fundamentals that can help too. Prudent investing is done from the bottom-up. This means we make investment decisions based on each individual investment. It is much easier to analyze a particular company and assess its future than it is to guess where the entire market is going. This is obvious to anyone who thinks about it for a second, yet the standard question we get is, “Where is the market going?” That is what the media focuses on, so that is what people think about.

This is also true in analyzing managers. We need to understand how they make investment decisions and if we believe they have a solid process and are able to execute efficiently. This is far easier than trying to understand what the market will do to them in the short run. That patience leads to long-term success.

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