Warren Buffett once said: ‘In the business world, the rearview mirror is always clearer than the windshield.’
Nowhere was this truer than in March 2009.
Back then, it was a terrifying time for the global economy. The subprime mortgage bubble had just popped. And the banking system was left reeling from the financial shock.
What we saw was the worst upheaval since the Great Depression. Millions of Americans had lost their jobs. Millions of homes had been foreclosed. The stock market was falling. From peak to trough, the S&P 500 had lost over 50% of its value.
In March 2009, everyone was in a foul mood. No one could see any light at the end of the tunnel. How could they? The anxiety was inescapable. The prophets of doom were banging on their drums. There was nothing but bad news all around.
And yet, despite the negativity, March 2009 was actually a turning point. That’s the exact moment the American economy started to recover. Green shoots began sprouting. And the stock market started to gallop, embarking on the longest bull run since the Second World War.
Since then, the S&P 500 has surged by over 1,000% in nominal terms. It’s an extraordinary comeback. No economist predicted this. No one believed such a renaissance was even possible.
Of course, we all know that hindsight is 20/20. But even so, our collective memory of the Global Financial Crisis can be shaky. Unreliable. Flawed.
You see, everyone talks about the trauma of the stock market’s 50% decline. But no one ever talks about the miracle of the 1,000% gain that came after. No one even gives it any credit.
Indeed, human beings are strange like that.
Still, I think there’s an important lesson here for us.
Existential fear can be oversold. This means that the pain of a market drawdown is survivable. But what may not be survivable is the allocation decisions made in the year that follows. That’s when investors are frightened. That’s when they make impulsive changes to their portfolios. And that knee-jerk reaction is almost certainly the wrong move.
Of course, what is true of investment portfolios is also true when it comes to individual companies.
This context matters because periods of market dislocation often create valuation swings that have little to do with a company’s underlying economics.
Some businesses operate in roles shaped by regulation, infrastructure, and long‑term client obligations. These are dynamics that can behave differently from the broader cycle.
Today, we look at one such case.
This is a fintech business that’s down over 30% this past year. But perhaps the negativity has been overdone…
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