David Poppe: Arguing With Mr. Market

In his latest Q4 2021 Letter, David Poppe discusses arguing with Mr. Market. Here’s an excerpt from the letter:

At various points we pruned Alphabet, Carmax, Arista Networks, Credit Acceptance, Eurofins, and JP Morgan. Of those, we reduced JP Morgan to make room for M&T Bank, but the others were strictly based on valuation.

I don’t believe in arguing with Mr. Market on a regular basis. That is, it is not productive to think I can estimate value with precision, and then trade stocks based on my assessments. Portfolio management is not a work of art that gets better with endless sculpting.

If one of our stocks rises spectacularly, the right answer generally is not to argue with the market but to listen to it.

Mr. Market is trying to tell us something: you got this one right! Learning how to take a compliment is a skill in and of itself, and especially so when one of our companies turns out to be even more valuable than we thought. (The reverse is also true: if the market hates something you own and bids it down, remember that this is the collective judgment of thousands of smart people. Are they wrong, or are you?)

You can read the entire letter here:

Giverny Capital – Q4 2021 Letter