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A Way of Thinking I Can Get Behind

Greg SankeyWay of Thinking is the commissioner of the Southeastern Conference universities’ athletic endeavors.

By all accounts, he is competent and good at his job. This morning I heard him on the radio (red-ee-oh in some of those SEC states), and he said, “Like Winston Churchill [said] ‘The only thing we have to fear is fear itself.'”

Uh, no. Immediately I thought of Bluto in Animal House, “Was it over when the Germans bombed Pearl Harbor?” I used that line once in a Sunday School class I was teaching, and it wasn’t the best reference for a group of 70+ ladies in the year 2000, I discovered. Today’s free takeaway: Know your audience.

I couldn’t wait to get to work this morning and look up Greg Sankey’s email address to let him know that FDR, not Churchill, famously offered the observation on fear to a country struggling to come out of the Great Depression. But I decided that several hundred other people more than likely beat me to the punch.

Way of ThinkingLife in the public eye is like that.

You can offer 101 pithy, intelligent, and valuable observations and get a few notes; you confuse Winston Churchill with Franklin Roosevelt, and you get 842 insults, jabs and corrections. What drives that need to correct? Is it simply a need to feel superior?

If that’s it, we (meaning you and I) get the same in our investment efforts. We all hear from someone that says something similar to “I was talking to my neighbor and his broker earned him XXX% last year,” or perhaps, “No, the real investment opportunity is [fill in the hot new industry du jour].”

I first heard a version of this when I was a kid, and (pardon me if I’ve told you this before) Eddie Haskell convinced Wally and Beaver to dump their dreary old Mayfield Power & Light stock and buy Aerospace Amalgamated. Of course, the Aerospace stock tanked when they lost their defense contract, and good old Mayfield Power& Light just kept cranking out the kilowatts.

Looking back now, I do wonder what message the show writers were trying to convey.

Way of ThinkingAre they saying that we should all be in utility stocks all the time? If so, they missed the boat the last three to five decades, didn’t they? Were they just saying that Eddie Haskell was a jerk and always ignore him? That sounds like good sound advice. Better perhaps one should use Eddie’s advice like George Costanza figured out about his wisdom. Since his life was going so poorly, whenever he figured out what to do, he “DID THE OPPOSITE!” Yes, I can get behind the idea of identifying someone in our lives that regularly spouts moronic advice and always doing the opposite. This could well be a gold mine of a plan.

But if the theme of that Leave it to Beaver was to make life decisions by doing your research, listening to respected authorities and experts (Ward Cleaver!), and then stop yourself from making rash changes to your plans based upon slick pitches that appeal to the greed or fear that comes with human nature, then yeah, I can get behind that thinking. Perhaps we need to run that episode as part of new client orientation if we could only get past the royalties issues.

It’s a tough investment market out there right now.

Equities have been flat to slightly up from May through July with high Price/Earnings Ratios, and bond yields are in the dumper. Real estate is red hot in my area of the country, and yet workers aren’t headed back to work in droves. And then the COVID Delta variant threatens the economy, but who knows to what extent?

I never quit wearing a mask in the grocery store or convenience store. Why? I have an 87-year-old relative with heart disease that recently contracted COVID, spent three to 4 weeks in the hospital, and is now fine. At the same time, a fellow that was a few years behind me in high school contracted the virus and is now deceased. I think we all need to be careful with this virus going around and ignore whatever Eddie Haskell has to say on that subject.

I am much the same with my investments.

I am still buying into my long-term portfolios and looking for opportunities to buy on dips, keeping a bit more cash than usual, and looking for alternatives to traditional fixed-income investments. It may not be an exciting approach to many, and I have not made or lost a dime on cryptocurrencies, but it’s what I call investing, not speculating.

So whatever area of life you may wish to talk about, I am pretty much doing what I always do. I encourage you to do the same in your life, but I’ll offer the words Sergeant Phil Esterhaus of Hill Street Blues used to punctuate each daily role call: “Let’s be careful out there.”

August 2021

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. No strategy assures success or protects against risk. Investing involves risk including loss of principal. 

Investments in real estate may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector. Other risks can include, but are not limited to, declines in the value of real estate, potential illiquidity, risks related to general and economic conditions, stage of development, and defaults by borrower.

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