Most failure comes not from knowing what to do but from not being able to go through the discomfort in the present to create success in the future. In the stock market and in life, fear is a great enemy. Fear maybe will not destroy you, but it will shrink your life into a small fraction of your potential.
We are in a bear market. Stocks go down many times way more than their future values. But how do we handle fear? First, it’s okay to be afraid. It’s painful. Just don’t act on it. Hang in there. The stock market goes up 75% of the time. Being an optimist is not stupid. It’s realistic. I have a checklist.
Van Clemens & Co. Bear market investing checklist
One, are you diversified?
Number two, the companies you’re invested in do they have strong balance sheets?
Three, are they profitable?
Four, are they undervalued? Are they less than one times book value, less than one time sales, less than 10 times earnings?
Five, are the companies leaders in their industries?
Six, are the markets they are in growing?
Seventh, are the insiders buying their own stock? Just because the stock goes way down does not mean it’s a bad stock. Just because the stock goes way up does not mean it’s a good stock. Don’t focus on stock prices, focus on the quality of the business.
Tim Clarkson’s 2022 biggest stock winner is…
Cheaper stock is actually less risky, not more risky. Train yourself to be a buyer in bear markets, not a seller. As an illustration, CVR Partners, a fertilizer stock, had dropped from $250 to $6.
I had started buying it at about $100, and I kept buying it down to $6. It’s back to $130. It’s my biggest winner this year. It was part of a diversified portfolio. It was undervalued. The president of the company was buying it. I was guessing that the price of corn would rebound after an eight-year bear market. And then it did. The Russians invaded Ukraine and made the US the last place in the world where fertilizer can be made at a profit. Now that was a lucky break. Remember, success comes from walking through fear, not running from it.
Disclaimer
The discussions contained in and referred to in this podcast are provided for educational, information,
and entertainment purposes only. The information, statements, comments, views, and opinions
expressed or provided are not necessarily those of Van Clemens and may not be current. Van Clemens
does not make any representation or warranty as to the accuracy or completeness of any of the information, statements, comments, views, or opinions contained in this podcast. Any liability, therefore,
is expressly disclaimed.
Van Clemens does not undertake any obligation whatsoever to provide any form of update, amendment, change, or correction to any of the information, statements, comments,
views, or opinions set forth in this podcast. You should not make any decision, financial, investment,
trading, or otherwise, based on any of the information presented in this podcast without undertaking
independent due diligence and consultation with a professional broker or financial advisory. You
understand that you are using any and all information available on or through this podcast at your own
risk. You’ve been listening to Investing Beyond the Noise with Tim Clarkson, vice president of
investments at Van Clemens and Company in Minneapolis. Visit van clemens.com or call 612-758-
9140.
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