Perhaps predictably, the airwaves and newspapers are still full of little else. Speculation is rife, and theres little point adding to it here.
Which isnt to say that the drama still unfolding in Greece isnt without lessons for investors.
Or, for that matter, doesnt offer some potentially very profitable opportunities as well.
And Ive certainly been taking advantage of those opportunities. Have you?
Panicked markets
Lets start with the basics. On April 27, the FTSE 100 closed at 7,103 an all-time high.
Now, after some weeks of Grexit worries, the market is down 8%. And judging from the sea of red on my screen, its likely to be heading further south still.
So its not surprising to hear pundits speaking of panicked investors fleeing equities, and racing lemming-like into German bunds, United States treasuries, and Mongolian yak futures. (Okay maybe not that last one.)
Its predictable, to be sure. But not necessarily a profitable course of action. German bunds, for instance, currently yield 0.7% implying for UK investors a real (inflation-adjusted) rate of return that is negative, ignoring the effect of any further depreciation in the euro.
What will it mean?
Now, lets just put events into context. The market is down 8%, and could go further.
Just for the sake of argument, lets assume a 10% fall. It might be more; it might be less the point is that no one knows.
But do the events presently unfolding in Europe mean that decent, solid, British companies are going to make 10% less in profits?
I very much doubt it.
For while some businesses will find that a weaker euro makes for a tougher export market, businesses importing from the eurozone have cause for cheer.
And for those businesses with minimal exposure to the euro, then the overall impact is likely to be, well, minimal.
Weve seen this movie before
Of course, with the media reporting hordes of investors fleeing equities and heading into Mongolian yak futures and heaven knows what else, its only natural to want to join them.
But why? Those of us with long memories have seen this drama play out many times before. Black Monday, the Russian debt default, the South East Asian financial crisis, the collapse of Long-Term Capital Management, the first Gulf War the list is long, and being added to every few years.
But despite its length, Ill wager that few of you recall such events in anything but the very broadest terms. Far less the fear and panic that gripped financial markets at the time.
And so, Im sure, will be the case with todays unsettled markets. In a few years time, it will be a huge so what?.
Traders vs. investors
The real problem for us investors, of course, is that a lot of the blame lies with sloppy media reporting, and flawed logic.
Lets deal with the former, first. To be blunt: arguably, very few real investors are fleeing anything. The fleeing is mostly down to stock market tradersnamely, City professionals.
Because for traders, switching out of asset classes is perfectly reasonable. But that isnt to say that its the right thing for you and I, who are prepared to take the long view.
Which brings us to the flawed logic. Because investors like you and I should actually welcome such periodic waves of panic in the markets, and see them as a buying opportunity.
Thats right: a buying opportunity.
Nervous markets = lower prices
To see why, lets paraphrase slightly the words of Warren Buffett.
Who memorably put it this way: if youre a net buyer of stocks rather than a net seller of stocks should you welcome low prices or high prices?
Low prices, of course.
Because with lower prices, we can naturally enough buy more shares for our money.
Which can have a big impact on our performance. Do the maths, for instance, and youll see that with a 25% decrease in a companys share price, you can buy 33% more shares and obviously get a 33% increase in income, assuming an unchanged level of dividend.
And Im certainly a net buyer of stocks and hope to be for many years yet. You too, Im guessing.
Pushing the buy button
So it shouldnt be a surprise that I took advantage of the opportunity that these market worries has presented.
On Monday morning, as markets digested the Greek No vote, I was buying into a FTSE 100 engineering business that Ive had my eye onand whose shares are already down 12% from my previous purchase price.
And with markets seemingly set for a nervous summer, Im hoping it will be the first of several such purchases.
Yes, we’re in it for the long haulhere at the Motley Fool, andwe focus on investing in great businesses for years rather than months. It’s over that kind of time horizon that we can make sensible judgments on how a business is likely to perform, and whether the price is right.
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