[Investment Philosophy #1] Never Miss the Chance to Buy Great Stocks at a Discount

The core of my first investment principle is simple: When a fundamentally strong company experiences a sharp decline due to external factors, buy aggressively. In other words, no matter how excellent a company is, never pay an excessive premium.

Many investors emphasize the importance of holding high-quality stocks for the long term. I agree. However, the more critical question is when to buy those stocks. While great companies tend to rise over time, simply buying at any price rarely leads to significant outperformance. More importantly, buying at a peak forces you to endure unnecessary losses and wait a long time just to break even.

This is why it is crucial to act when good stocks experience a major correction. But why do most people hesitate to buy during such downturns? I believe there are two primary reasons.

1. Lack of Conviction The fear that a stock will continue to fall indefinitely often stems from a lack of confidence in one’s own research. If you truly understand a company’s intrinsic value and competitive edge, a price drop is not a reason to panic. On the contrary, if a company you’ve been watching falls due to external noise, you should see it as a golden opportunity to grow your wealth.

2. Failure to Distinguish the Cause of the Decline I categorize stock crashes into two distinct types:

• Internal Issues: Weakening competitiveness, loss of market share, or structural flaws within the company.

• External Factors: Macroeconomic downturns, geopolitical events, or market sentiment—factors that have nothing to do with the company’s core fundamentals.

If the decline is driven by the second reason—external factors that don't impact the company's long-term earning power—that is the time to be bold. This is how you position yourself ahead of the market and achieve superior growth.

In my next post, I will share a real-world case study of how I applied this principle to a specific investment.