The Investor’s Mulligan
According to Wikipedia the term “Mulligan” means – “A second chance to perform an action, usually after the first chance went wrong through bad luck or a blunder.”
The most common application is in golf, whereby a player is informally allowed to replay a stroke, even though this is against the formal rules of golf.
My game often depends on it!
The reason I bring it up is that while the ugly first quarter of 2020 is well and truly over (phew!) its impact remain with people emotionally and psychologically for far longer than prices will stay down.
What that means is we’re now in a unique window as investors where the most difficult task is to understand that we likely need to accept its over and the horizon will be brighter.
In other words: Q1 of 2020 will require a Mulligan, and long-term, this will all be fine even as we trudge through the very sloppy and ugly valley in-between bad and better.
So, let’s spot the ball from the previous stroke (without emotional penalty) due to the errant shot by Covid-19, and replay the hole as if that stroke had never been made, so to speak.
Wheat from the Chaff
Without trying to sound unfeeling there are really two types of investors right now: Those who will make it through this storm to the other side of the bay; and those who will not.
By the way, I wrote those same words back in December of 2008, as we were at the time witnessing events most investors had never seen before.
Once again, these comments have nothing to do with the human loss we are all witnessing and suffering through.
I’m simply here to express that history is strewn with events which, co-existing on parallel pathways, included heavy loss of life and many human difficulties alongside life-changing financial shifts to the upside.
And they were all dark, ugly, painful, and terrifying.
The Grim Reaper Sifts
The sifting process is working through the system.
As we said well over a year ago, the 2020's and 2030's will birth more change and disruption than any other time in history.
It’s the home of Generation Y – where the Barbell Economy© is real - and being laid bare for all to see.
The first 6 months of the 1980s - the first decade of the Boomers – in a word, sucked.
Markets stunk, red ink was all we saw, and massive disruptions were roiling the economy.
The US economy at the time was just 1/20th of what it is today.
In perspective, that makes our all about siphoning through this garbage and doing our best to understand how this sifting process will chew through old processes and birth new ones.
And while patience will be our most valuable asset, fear and normal emotional reactions will be our worst enemy and multiplier.
I know that watching the news can be tough. It operates like an amygdala, panic button charger with the sole intent of keeping your intention by finding new ways each day to try and scare the crap out of you.
And boy are they good at it!
An Important Clarifier
Admittedly, we are all witnessing events we have never seen in the US.
I was joking with the team yesterday that I am just waiting for a director guy to jump out from stage left and yell "Cut - that's a wrap - great job guys...."
But we’re here to help create some light on this pathway ahead.
And sure, it would be far easier to cave – to just grab up another shit shovel and start feeding the septic engine alongside the Bad News at 10 that’s powering each daily flush.
But we’re not buying up extra stores of loo roll.
We’re playing the patience game.
Because we know this too shall pass.
Mike Williams, TruVestments