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Is it a mistake to completely ignore the short-term?
This is an excerpt from our free Sunday newsletter for the Chit Chat Money podcast:



"I’ve been drafting up our annual client letter for 2022. We like to share our letters in public not just for marketing purposes but to help other people on their investing journey. The same goes for the podcast and this newsletter.

We made a few mistakes in 2022, but none bigger than sizing up positions in stocks that had identifiable short-term risks and traded at premium earnings multiples. As you may have guessed, that was a recipe for disaster (luckily for only a few holdings) that we want to try and avoid in the future. To do so, we want to add more scenario planning around what a stock might do over the next few quarters into our analysis while still focusing on a 3 - 5 year timeframe. This should help us avoid larger drawdowns on individual positions even if we think the stock looks attractive at current prices. In these scenarios, there is a high chance it might get much more attractive a few quarters from now which we don’t want to restrict ourselves from going after by taking too large of a position at a higher price.

Putting emphasis on the near term doesn’t mean becoming a hyperactive trader. But it can definitely help with the number one rule in investing: don’t lose money.
Obviously, nobody will be perfect in identifying short-term risks, but I think it can be foolish to completely ignore them."

What do you guys think: Is it better to completely ignore the short-term or take it in account when making an investment decision?

I've heard good arguments from both sides
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