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Invest Based On Competitive Advantages

Do not invest today because a company has ephemeral market positioning during this Covid-19 pandemic. Rather, invest in companies with durable competitive advantages. Those advantages are sustained in rain and sunshine.  They help you protect your flanks.

The black swan that killed the longest bull market in history arrived in the form of a bug, and it descended with such ferocity that the Dow Jones industrial average had its worst quarter since 1987, more than a generation ago. That crash was caused by technical factors and was largely a one-day event; this crash comes thanks to a global stoppage of much of humankind’s economic activity. For precedent and parallels, we might look to 2000–2002, when we were hit by the double whammy of the dotcom crash and 9/11, and to the financial crisis of 2008–09. But it’s rather futile to search for analogs to the coronavirus crisis. Like any crisis, this one was unexpected, unplanned for, and largely unprecedented. That’s why we call it a crisis.