Warren Buffet loves to buy more good investments at cheap prices. Peter Lynch says that the market has corrections on a regular basis. If you can’t handle that, you shouldn’t buy equities.

The greater the performance, the greater the drawdown. TQQQ outperforms the S&P by about 25 percentage points per year. The drawdown of the Stars strategy is about 25 percentage points greater than the S&P. Stars makes new portfolio highs every two years after a major correction. Over 25 years you can barely see the dips in performance from major corrections because the returns are so great.

Most great wealth is generated by buy and hold strategies. In all cases you have drawdown. Investors are taught that drawdown is bad where in reality it is the only way to have great performance. The financial services industry tries to minimize drawdown by diversification and risk adjusted returns. The truth is they only reduce performance to less than the S&P. In a major correction all portfolios that contain equities have drawdown.

Over the past 25 years the Stars strategy outperformed the S&P by a factor of 17. Over the past 15 years Stars outperformed the S&P P by a factor of 10. These are unbelievable results considering the average investor underperforms the S&P by 5% per year.