Dodge & Cox's Diana Strandberg says the current environment highlights just how difficult it is to time market cycles, highlighting the importance of persistance with stock picks.
Dan Culloton: As a buy-and-hold and bottom-up investor, certainly you must have heard and had an opinion on a lot of the questions from some corners of the investing universe over the durability of a buy-and-hold strategy after the past 18 to 20 months. Is buy-and-hold dead?
Diana Strandberg: Well, I go back to what we think--and one of the lessons we hope investors take to heart watching the current year unfold--is that persistence matters greatly to your long-term returns. To the extent that we continue to look bottom-up at individual companies and where we feel the valuations are attractive on a 3-5 year basis, we want to be able to persist as an owner of these businesses. And what the current market has taught us--and we've seen this in other instances as well--is that things can turn on a dime, and it's notoriously difficult to pick the moment.
So as an example--I went back because I was so curious to learn--what happened on March 10th? I went back and looked at headlines during that week, and maybe I missed it, but I didn't see a headline that said: "This is it! Get in!"
So that points to, you really need to be there and have that patience and persistence. What allows us to be patient and persistent is that we're doing our own research, we're moving very gradually, and we believe that we've built, over decades, a depth of experience into individual companies but also market cycles.
Culloton: Thanks very much for your time today, Diana. I appreciate it.
Strandberg: Thank you!
