One of the most difficult tasks faced by investors is maintaining conviction with a company in the face of short-term, negative price action. Quite often, it is the noise of a stock’s recent price decline that analysts and news outlets choose to highlight, making it hard to separate the business-case fundamentals from the fluff. This article (link) teaches a crucial lesson, using Under Armour and Nike as case examples. As patient investors, bottom-up research stands at the heart of our daily work – by truly understanding our core holdings, we are better-equipped to focus on the investment thesis that matters in the long run.
In the attention to details series, we lift the lid on what WDS does behind the scenes to invest well by sharing what we are reading. These are pieces that often articulate different aspects of our philosophy and ultimately our process. Check back regularly for a new article that is worth the read.