06 May 2009 Century Management Advisors - Q1 2009 Commentary ( Portfolio )
While sharp market downturns cause fear, panic and economic dislocation, they are oftentimes a necessary precursor to an upturn as they force individuals, corporations, and even the government to get their balance sheets and financial statements in order. We believe this is taking place today as corporate and consumer debts are being paid down, excess costs and expenses are being reduced and eliminated, and savings rates are increasing. It is out of all this pain and discomfort that we believe the seeds of recovery are being planted, and eventually substantial profits will be borne. The world is not ending, the majority of people will remain employed, most people will make their mortgage payments, and our country, with all of its global reaching products, services, and innovation, will continue to be an economic leader and force throughout the world. Successful investing over the long-run has always required patience and long-term perspective; this has never been truer than today.

In the 2008 Berkshire Hathaway annual letter to shareholders, Warren Buffet said he's "certain the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond -- but that conclusion does not tell us whether the stock market will rise or fall." Buffett continued, "Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead." We could not agree more.

In this market, the most important thing shareholders need to do is look out two or three years instead of succumbing to the temptation to look out two or three months.