Good afternoon.

As Russia continues to invade Ukraine, it's natural to feel sad, outraged and afraid.

How can we make sense of what's going on in markets?

On Monday, as peace talks ended and the Russian assault continued, the S&P 500 was down as much as 1.5% in the afternoon, but finished the day almost flat. And some riskier stocks, such as Tesla Inc. and MicroStrategy Inc., were up more than 7%.

Then just about everything (except oil, gold and cryptocurrencies) tanked on Tuesday.

Overall, investors seem to have decided that the war won't do lasting severe damage to the global economy; among S&P 500 companies, only 1% of revenues stem from Russia and Ukraine. And the disruptions from the war, many believe, will make the Federal Reserve less inclined to raise interest rates sharply at its March meeting.

That has benefited the riskiest stocks.

All this could change if the war drags on, worsens or widens to more countries. Anyone who claims to be able to predict what's going to happen next is either a liar or a fool.

I am pretty sure of one thing, though. I don't know much worse things might get first, but hope will eventually be rewarded. As I wrote in 2003: 

At heart, "uncertainty" and "investing" are synonyms. In the real world, no one has ever been given the ability to see that a particular time is the best time to buy stocks. Without a saving faith in the future, no one would ever invest at all. To be an investor, you must be a believer in a better tomorrow.

War tends to shove all other headlines aside, so I suspect the steepness of this downward curve in the past few days will surprise some people:

Cases could still surge again, a new variant might arise, but the speed of the recent decline in cases is remarkable. Let's hope it keeps moving in the right direction.

So far this year, not much except...

If this divergence continues, the left side of that chart could become more and more interesting to value investors.

In previous issues we've talked about the importance of curiosity, skepticism, independence, discipline and humility.

Now, after an appropriately long wait, we come to the sixth virtue of great investors: patience.

Reader Connor Cafferty says:
     I feel time is my greatest asset as it represents the potential of compounding in the future, but also time in the sense of "timing." I'm 27, began seriously investing 2 years ago. It's been an easy time to make money, but it's been a time where many valuable lessons have been learned by observing the indiscretions of my peers.... Coming of age in an era where so many ridiculous and baseless investment options are peddled under the guise of innovation makes me hopeful I'll remember for many decades "what it was like back then," the crazy first couple years in my investing journey.

That's for sure.

As I wrote in my commentary in the Benjamin Graham's book The Intelligent Investor:

After the past couple of years, as so many people have bragged about getting rich quick, patience might seem almost obsolete. Why bother trying to be patient in a world of instant gratification, an endless deluge of information, and stocks and cryptocurrencies that go to the moon?

Because gratification isn't always instant, most financial information is meaningless, and markets don't always go up. Sometimes they go down, not just for days or weeks but for years on end.

History shows that short periods in which investing feels like a game tend to be followed by long periods in which it is a grind.

That's what happened in 1720 and 1929 and 2000.

It will happen again, and when it does we will find out who is an investor and who has only been a pretender. Investors have patience. Pretenders don't.

Reader Toby Decker says:

I’m 78 years old [and I still] think long term, at least 7 to 10 years out...I could join my ancestors tomorrow, I hope I don’t, but by keeping 45% of my money in cash equivalents, I can sleep at night knowing that I should be able to weather [any] short-term deep dives in the market.

For investors, patience means doing as little as possible, as seldom as possible, for as long as possible -- not just weeks, months or years, but decades.

As for me, I have long thought of myself as investing for the next century. I will be long gone by then, but I have children and causes I care about, and in the year 2122 no one will know or care what the hottest trades of 2022 were. But they will know, and benefit from, the power of a patient and steadfast focus on the long run.

Be well and invest well,

Jason

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All of human unhappiness comes from only one thing: not knowing how to remain at rest in a room.
—Blaise Pascal