Great analysis of ST vs LT thinking in markets today in a recent podcast - first half hour or so.

It also covers some potential reasons why.

Shrinking Timeframes and First-Order Thinking Since the Covid Crash | This Week in Intelligent Investing

https://twiii.podbean.com/e/shrinking-timeframes-and-first-order-thinking-since-the-covid-crash/

I tend to agree with John M's observation that this may not reverse any time soon.

Some obvious evidence for this is the big switch out of pre-profit fast growing businesses.

(Note, some should never have been so well owned and outlooks were overly optimistic)

Jam tomorrow companies / stories were well bid, but now the market only wants jam today.

This got me thinking about ...

A Potential Strategy from this.

Find ST bad, LT good businesses with ST reflected in the price, LT good aspects not reflected as a result.

You can also think of this as poor cyclical with strong structural outlooks (as long as more of the former is reflected in the price).

Probably not easy as you will likely need to hold until enough time passes for the LT to arrive in the ST / become obvious.

You'd also need to devine the future of these businesses / their industries at least directionally but also reliably.

Buffett's Take on the theme

This approach reminds me of something Buffett said once and executed on more than once.

"The best thing that happens to us is when a great company gets into temporary trouble. ... We want to buy them when they're on the operating table."

He most famously did this with this AMEX investment in 1963 (after their salad oil fraud) see here for details - https://fundamentalfinanceplaybook.com/histories/the-salad-oil-scandal-of-1963/

This amounted to the sort of fat pitch he waits for. He even upped the single stock holding limit for his partnership to make AMEX 25% of the fund and ultimately a huge winner.

Some Potential examples

LOV - shrinking same store sales while rolling out a global expansion into a deteriorating economy.

WTC - slowed and slowing global trade impacting logistics while they reinvest aggressively including M&A in adjacent parts of their market.

FDV - EM unloved and fundamentally challenged (especially Pakistan) while experienced mgmt build out dominant marketplaces in countries with growing digital penetration and secular growth tailwinds.

PNV - Bucking the latest small cap trend of producing a profit when you can to instead reinvest all profits to chase a huge global opportunity (although the price seems to reflect this "LT good" setup in this one I reckon).

Any other examples you strawfolk can think of?

Or any rebuttals of this approach?