STREET DOGS

From Drew Dickson at Albert Bridge Capital:

Istarted an investment club in college with $100. I had seven buddies who also saved $100, so we had $800 all-in. Three months later, the Dow fell 22.6% in a single day.

At Fidelity, I was assigned to cover software and IT services in Europe in late 1999, and ramped up on my sector just months before the tech bubble started bursting. From March 2000 to October 2002, the Nasdaq composite dropped 78%. One of the stocks I covered was a German company that marketed e-commerce software. It had a market cap of over $70bn. Its market cap today is $30m. That means it fell 75%, then another 75%, then another 75% and then another 75%. Then another 90%.

I launched the Alpha Europe strategy in April of 2008. In the six months from September 2008, the S&P 500 dropped 46%.

I’ve been through some rough times. But it still sucks. Despite all these experiences, I’m not immune from the emotion. I am struggling to stay objective. Sure the market is down a bit, but what’s happening just below the surface is – for some of us – even tougher to stomach. The recent outperformance of low-volume, growth momentum stocks has even the most fundamental of stock-pickers wondering if there is any point to visiting companies or building models. Heck, it even has the quants questioning their own frameworks, if not the entire theory behind what it is that supposedly drives momentum or value or low-volume premiums.

I’ve seen wilder times than these and I tell myself these experiences help, but maybe they don’t. I find myself occasionally wondering if “this time it’s different”. But guess what? This time it’s probably not different. Markets ultimately work. They find themselves. The right price finds itself.