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Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better.

Today's Issue Read Time: <2 minutes

Lesson: The importance of disagreement
Timeless Content: A contrarian view on real estate
Thread: Glassdoor "Best Places to Work" List
Resource: Stock ideas for the New Year
And more!

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Friends,

There's an old adage that -- when gathering with families over the holidays -- you should avoid discussing politics or religion. Entrenched opinions can quickly lead to massive fallings-out.

In the age of social media, you could apply the same logic to debating the merits of popular stocks. Entrenched opinions can quickly lead to toxic interactions for everyone involved.

And yet -- so long as you're a long-term investor -- you should WANT most people to disagree with you.

As Warren Buffett put it:

"You pay a very high price in the stock market for a cheery consensus."

One need only look at the fate of the pandemic's darlings for proof of how this works out.

Take Zoom Video Communications (a stock all three of us once owned) as an example. It was obviously a must-own stock given the new reality of how the world worked in 2020.

Here's how that cheery consensus has worked out -- from the company's late 2020 peak: down over 80%.

Perhaps finance journalist Jim Grant put this phenomenon best when he said:

"Successful investing is having everyone agree with you...later."

Take the fate of Tesla. Back in 2018 and 2019, the company had debt payments coming due. It looked like it might default on those payments. Elon Musk claims he tried (unsuccessfully) to get a meeting with Apple's Tim Cook to have the company acquire Tesla.

The stock price reflected that pessimism. Here's the 25-bagger plus returns from the stock since it avoided that fate.

None of this is to say you should go around being contrarian for the sake of being contrarian. That's annoying and dumb and will likely lead to you losing a lot of money.

It means that if you have conviction in your beliefs, you don't have to convince anyone you're right.

Over time, what happens in the real world will prove it.

Just knowing that can add years to your life -- years to let those investments continue compounding.

Wishing you investing success,

Brian Feroldi, Brian Stoffel, & Brian Withers

Long Term Mindset

P.S. Feroldi recently published a free masterclass on the stock market for beginners. Check it out.

One simple graphic

One piece of timeless content

Real estate has made many investors rich. But, the long-term macroeconomic trends driving the housing growth may be stalling. Or even, in some cases, reversing. Check this in-depth piece titled Why I Don’t Invest in Real Estate for more insights.

One thread

Brian Feroldi

@BrianFeroldi

Glassdoor's "best places to work" list is a great hunting ground for investing ideas:

7:55 AM • Dec 30, 2023

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One resource

Need some new stock ideas for the coming year? Morningstar has you covered. Check out their The Best Companies to Own: 2025 Edition for 100+ stock ideas in seven industries.