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The Cost of the Chase

July 23rd

As we look at the major acquisitions that others made during 1982, our reaction is not envy, but relief that we were non-participants. For in many of these acquisitions, managerial intellect wilted in competition with managerial adrenaline. The thrill of the chase blinded the pursuers to the consequences of the catch.

Warren Buffett

In the realm of investment, it's common to be swept up in the thrill of potential deals, the adrenaline rush of outbidding rivals, and the alluring charm of closing a deal. But, the true worth of an investment lies not in the chase but the consequences that follow.

Immediate gratification can often eclipse the long-term repercussions. When cognitive prowess is overtaken by emotional eagerness, the long-term stability of an investment decision is at risk. This is a lesson in the value of restraint, careful evaluation, and independent thinking in the face of frenzied competition and mass euphoria.

As we navigate our investment journey, we must remain grounded, not letting the allure of the chase blind us. It's crucial to scrutinize the long-term implications before jumping into a potential deal. Stepping back and observing the madness from a distance might sometimes be the better decision.

As investors, our goal isn't just to reel in the catch but to understand and tolerate the consequences that come with it. If the thrill of the chase starts blurring the potential outcomes, perhaps it's wiser to remain a non-participant, secure in our prudence.

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Copyright © 2023 by Scott Sansovich