Let’s allow ourselves just a short paragraph of spilt milk, then on to your money.
SPILT MILK: If Nader had endorsed Gore or the Florida votes had been counted fairly, there would have been no war in Iraq, no right-wing Supreme Court, no Citizens United, no Trump; we’d have made far more progress on climate change and invested trillions to revitalize our crumbling infrastructure, creating millions of good new jobs along the way. (Gore did get more votes than Bush, after all. And Bush did ignore “a tremendous” “immediate” threat he had nine months to avert.) Likewise, Hillary. I know many Republicans can’t stand her (e.g., my Harvard classmate who believes she diverted $2 million from Haiti relief to pay for Chelsea’s wedding) and many Democrats can’t stand her either for getting more votes than Bernie or else for not getting enough more votes than Trump . . . Putin has done a masterful job of getting us to hate each other . . . but I dare you to watch Hulu’s new documentary and fail to conclude that the Clintons — though imperfect, like any humans — are not fundamentally brilliant, wonderful people who have dedicated their lives to making a better world. If only we had leadership like that now. Instead, we have leadership described in Michael Lewis’s The Fifth Risk.
OK. Enough of that.
We will get through this.
> Covid-19 will pass just as the Spanish flu did, only with far less deadly consequences.
> Oil prices will rebound, as oil prices always have. At these collapsed prices, exploration and drilling (hence, supply) will be cut; Russia and Saudi Arabia may someday restore OPEC’s pricing clout; global demand may recover or grow . . . though I hope not for use as fuel. (As the Shah of Iran said more than 40 years ago, oil is much too precious to be burned. More to the point: we urgently need to confront climate change.)
In the wake of the market meltdown, my friend the estimable Less Antman (who offers 10 reasons NOT to retain his services) wrote his clients:
While my colleagues in this industry are dealing with panicky calls from clients, I continue to revel in a practice of people who either totally ignore short-term market fluctuations or who respond to panic with wonder as to whether they should put their remaining idle cash to work! Outside of a couple of people just asking if there is a special response needed to yet another flu/virus panic (SARS, bird flu, swine flu, Ebola, Zika in the 21st century alone), nobody has forgotten that we are long-term investors.
For the record, I don’t recommend either fear OR greed at this time. Relax & remind yourself why you chose to work with me. We are the owners of a globally & industry diversified portfolio of businesses providing useful goods and services & we expect to receive the normal rewards that come from being such owners. We accept the uncertainties of market fluctuations but know there is no safe haven if the world is coming to an end so we might as well assume that it will not end.
Save. Invest. Diversify. Wait.
I named the firm SimplyRich because the fundamentals of successful investing ARE simple. I didn’t call it EasyRich because it requires a patience most people are unwilling to show when it matters. We do.
So enjoy the spectacle or ignore it as you choose. Don’t waste time figuring out if you should invest spare cash. Let everyone else be consumed by fear and greed and remember we are the patient & stable people that businesses depend on for capital in order for capitalism to function. We’ve been rewarded handsomely & have no reason not to expect that to continue.
You already know we aren’t going to get out of the market. But we also aren’t going to try to outsmart other people and call a market bottom. We are investors, not traders or speculators.
Fun fact: Today is the 11th anniversary of the bottom in the 2007-2009 bear market and is officially National Panic Day. Really.
Really? Others say yesterday was National Get Over It Day.
International Panic Day is celebrated June 18 each year.
I can absolutely see scenarios in which the market falls a lot further before eventually returning to its recent highs; but Less makes a lot of sense — especially after factoring in the capital gains taxes selling might trigger. It might have been smart to sell a month ago. (And is still smart to sell now if you made the mistake of investing money in stocks you might actually need in the next few years — that money should not be exposed to risk.) Otherwise, I wouldn’t rush to sell here, least of all “our” quirky little stocks. Several of which I plan to discuss tomorrow.