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Quick Thought Of The Week: Lemons

I was watching one of those televised Oval Office presidential briefings the other day. Specifically, it was the one in which Trump was trying to justify his claim that hurricane Dorian would hit Alabama.

Of course the chances of Dorian affecting the southern state were as slim as me winning the lottery….

…. it would seem that someone had taken a felt-tip pen to extend the path of the deadly hurricane on an official weather map to include Alabama.

It’s laughable but true. Who would do such a bone-headed thing?

But this is just one of many untruths that has been peddled by the current US administration. That made me think. How can anyone possibly make investing decisions based on lies, deceptions and exaggerations?

One of the things that we need when we invest is reliable information. If we can’t depend on the data presented to us, then it is better to ignore it, entirely.

That is precisely what I have done ever since the present US administration claimed that more people attended the presidential inauguration than those that saw Obama being installed.

That was clearly not true. Even a two-year-old child could see that.

But is really quite sad and disturbing that we can’t believe a single word that comes out from the mouths of those that hold high office.

That said, ignoring Trumps tweets, tiffs and tantrums has probably been one of my best investment decisions over the last three years.

As investors we need to stay focussed on the long term. For me that means looking for sustainable businesses. These are companies that have sustainable markets, sustainable customers, sustainable profit margins, sustainable cash flow and sustainable returns on equity.

So, try to ignore the noise. Instead, watch for unexpected events in the market that depress the shares of those sustainable businesses you like….

…. Put another way, if a lemon is occupying The White House, think about how you can exploit the situation to make some lemonade.

David Kuo does not own shares any of the companies mentioned. The Motley Fool Singapore does not own shares in any of the companies mentioned. All information is provided exclusively by The Motley Fool Singapore Pte Ltd, a licensed investment advisory research provider (MAS Licence No. FA100056-1). Any information, commentary, recommendations or statements of opinion provided here are for general information purposes only.