Happy Days are here again! Inflation is over! Woohoo!

Or maybe not… but for the moment, at least, animal spirits are back, we’ve had three good weeks in a row for the broad stock market averages, coming out of the interest-rate panic that crested in October, and now everyone’s looking for a “Santa Claus Rally” into the end of the year, or if NVIDIA ends up having another barn-burner report next week, maybe a “Thanksgiving Rally.”  Lots to get the heart rate up these days… heck, we’ve even got a new “secret” Warren Buffett stock!

The temptation, particularly when the market is rolling along nicely as it (mostly) has been this year, is to try to buy the hottest companies, in the hottest sectors, and get rich quickly by getting in before everyone else realizes how hot they are… and getting out with a big profit before everyone else loses interest.

That’s how it has always been, that’s what fuels the enthusiasm for trading, and we all get sucked into the search for those stories from time to time, with at least part of our capital… but I confess that my preference is usually to find companies that have found a way to get a little better every year, make a little more money, and gradually become far larger and more profitable without ever doing anything “sexy.”

So for the day, we’ll take a moment to think about that stuff, stepping back from the pulse-quickening effort to identify the “next NVIDIA” or ride the next commodity price spike to an exciting quick trading gain.  I’m sure we’ll be back in the hunt for the exciting trading stories before you know it, and NVIDIA will be reporting next week and could easily cause investor sentiment to pivot dramatically, either more positive or more negative, but for today, as news from the portfolio is fairly light, let’s get back to thinking about building wealth slowly.

It usually takes a long time for the very good smaller companies to compound into something great, and it’s a game of probabilities even for relatively steady firms, many of them fail even if they seem well situated… but I do find it useful to step back and read the books which help us reset our minds toward the search for extraordinary long-term returns.  To that end, I re-read Chris Mayer’s 100-Baggers recently.