In hindsight, 2025 seemed like twelve months of unfavorable news:
January: Fed on hold re interest rates
February: Concern about inflation re-accelerating
March: Worst monthly return since 2022; Trade and tariff anxiety
April: 1Q GDP -.3%; higher inflation forecasts; trade war uncertainty; IMF warns of global growth slowdown
May: Geopolitical risks; India-Pakistan conflict
June: Israel/Iran tensions causing oil price spikes; US bombs Iranian facility
July: Trade tension and new tariffs loom, slowing U.S. job market
August: Slowing job growth and sticky inflation
September: Weak labor data and continued sticky inflation
October: U.S. Government shutdown; U.S. sanctions on Russian oil
November: Longest ever shut down of 43 days; affordability concerns
December: Oil at four-year low; gold and silver boom
How ironic, then, that U.S markets posted record results and set new highs. Earnings growth was 10%, and GDP growth is likely to average better than 2%.
Here is the point: you must invest with a strategic, long game perspective focused on the best opportunities in the marketplace. Allowing investing to driven by less significant distractions will predictably disappoint. Lesser businesses will disappoint.
2025 turned out to be another year of great opportunity, but that news was not front-page material. Investing confidence flows bottom-up, from the high-quality companies in your portfolio. The good news is to be found in the financial statements of the best companies, some of that might be found on page 17. We read page 17!
Strategic investing is choosing to invest above the (daily) fray, and to focus on the more important data. We love the Charlie Munger quote, “I am 99 years old and almost dead, and I am optimistic! I can’t stand all of these 30-year-old pessimists.” Now that is a strategic perspective.
