The Tough Lessons Learned in Dark Times
"Courage is being scared to death – and saddling up anyway." – John Wayne
I would highly recommend no one EVER tries to interpret financial data based on politics.
Political fervour – which of late has turned into examples of outright hatred - has lost more capital for investors that any bear market in history.
Meanwhile, the markets are causing the public - and many experts - to use terms like: Disconnected; Fed supported; L-shaped for liquidity; Headed for a major fall; and on and on.
Now, we're all privy to the exact same side-shows and arrays of "expert commentary" like that seen in the months following the lows of 2009.
The lesson we should have learned from all that is this: Despite all the negative predictions, local and geopolitical nonsense the markets slowly, deliberately, and even painfully at times, rose nearly 500% before the virus hit.
Markets are a terrible place for emotions.
We have to find a way to teach ourselves to react in almost the exact opposite way that our feelings tell us to.
Because emotional investment decisions almost always look ridiculous in the rear view mirror.
The "liquidity" provided by the Fed didn't go into the market.
That's always the chatter from those who don't believe that the country can work together to overcome, just like we always do.
The "liquidity" went into bank accounts.
That's why there is now a nearly $18 TRILLION in the rainy decade fund.
Just as we saw in the last couple months of 2008-2009's debacle, there was one resounding scream from market participants: "I want cash."
The elephant in the room?
Investing for the long haul always includes periods of gut-wrenching emotions.
There is no "around" option, only "through."
If the pathway to that mountaintop was easy it would be:
- A) Too crowded, and, because of that,
- B) There would be no opportunity in it.
Future wealth is NOT found in easy math. It’s found in dark clouds, stormy times, fog-cloaked horizons and flat out, stone-cold, scary periods.
And you might think of markets as being designed to fool the "what's now" focus of the crowd.
Can we take a guess at what the market is seeing? Why it seems so "disconnected"?
Sure, we can. And the good news is that some of it is not a guess. Some of it is already factual.
Let's take a look:
While there was an expected loss of over eight million jobs where every expert fed the "end of the world" narrative, it was flat out wrong…by almost six million jobs!
Note also that the trend is up.
Yep, tough lessons learned in dark times.
And there's more...
And this is just the tiny, front-edge of Generation Y starting to roll out of rentals and into their homes.
Marriage spikes and children will not be far behind.
It doesn’t take a rocket scientist to expect that about 8-9 months from now, give or take a month - delivery rooms in hospitals will be jammed.
And experts will drive headlines that tell us that too, somehow, is bad news.
The seductive trade is fear, like round us like a security blanket since the lows of 2009, and 2000-2002, and so on…
The mantra – as I’ve said before – has become: "If I don't look forward to good things, I can never be disappointed."
But here is the deal: Markets fool the easy steps, test every fibre of your emotional being, and send you through the jungle to get to the mountain top.
Make sure you let that sink in, no matter who is the President.