Hidden Opportunity

Diamonds in the Rough: Identifying Talent – OrgChanger.com

Beginning back in February, the Great Companies of America, represented by the S&P 500, saw their combined value slide 34% in just over a month. It was the most violent decline in US stock market history, according to Standard and Poors, and the “worst” 33 days in the history of the S&P 500 Index.

Many investors panicked. They stopped buying the Great Companies of America, and what’s worse, many sold them at fire-sale, fear-induced prices. They gave away their life savings at a discount.

Other investors, those with a long-term view who could look past the discomfort and uncertainty of the moment, made the choice to buy shares of those same companies on sale. They chose to see opportunity in adversity. Where others saw the end of the world, they saw a 34% off discount on the largest, most robustly capitalized companies in the United States. And what followed, in true storybook fashion after the market bottomed out on March 26^th (based on the S&P 500 Index), was the 50 best days in stock market history. Those patient and disciplined investors were handsomely rewarded for their persistence.

While this is a narrow example in finance and investing, there is a larger truth here at play. Adversity brings opportunity. I am sure we can all agree, there has been plenty of adversity so far in 2020. But a few people have been able to peer into that adversity and see promise and potential.

We are in a society that seems to avoid adversity at all costs. We want to eliminate all risks, all hardships, all inequality. Unfortunately, we live in a fallen world where all those things will always exist. And we must seek the positive things wrapped in difficulty. If we avoid the hardship, we also miss the blessing. Not only does adversity bring opportunity, often adversity is the opportunity.

*Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.

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