How often do you get some form of the word “voracious” in a conversation? Today’s column adds one to that number. But it’s for a very good reason given what’s happening in the world today.
I was talking to my friend Herschel the other day, and I told him I expect two things to come out of this coronavirus experience. One is that we’ll see tremendous innovation and development in the areas of biomedical and pharmaceutical research, as well as in supply chain management and large-scale emergency preparedness. The other is that there will be a whole new segment of the population that permanently relies upon some sort of government-issued welfare or support.
Now, I confess my predictions are worth just a little less than a penny offered for my thoughts, but I present them nonetheless. Please bear with me as I wind my way through a labyrinthine series of ideas to try to make this point.
I was also recently talking to another friend who proudly lists herself as “Ursula the Sea Witch” in my contact database. She asked me to estimate what percentage of my recent conversations were about the coronavirus. While I was unable to give an accurate number, I was forced to admit the fraction was unsettlingly close to 100%. So much for my “thinking outside the box”.
Back to my friend, Herschel. He’s probably the smartest guy I know. This is, of course, subjective. “Smart” isn’t measurable beyond IQ points and test scores, and those measures don’t even begin to tell the tale of what is useful in terms of mental acuity. I consider him to be so smart because yes, he has all the mathematical and verbal skills we associate with intelligence as well as mechanical abilities and an unquenchable curiosity about how things work. The other aspect of his “smarts” that impresses me so much is that he constantly works at it. He is in his mid-60s and his thirst for education is as voracious as any young college prodigy.
And there — patient reader — are the salient points today: innovation, welfare, thinking outside the box, and working at it.
For investors, this slowdown of the economy and the related stock market downturn has presented us with challenges – these represent a burden for the pessimist, and opportunities for the optimist. One of my clients used to tell me that I was an optimist, and such was “in my nature”. He considered this a shortcoming. I asked him how he could ever invest in the stock market if he wasn’t optimistic about the economic future of our country and the businesses within it. I never got a satisfactory answer to that one, but I think the answer is that he simply couldn’t… at least, not with any level of comfort.
Yes, both lower stock prices and the demand for innovation lend themselves to opportunities for long term investors, but we must work at it to separate the opportunities from the pitfalls. We have to be smart; we must think outside the box, and never stop educating ourselves. There is no intellectual welfare for us.
To this end, did you read Warren Buffet’s comments made at the Berkshire Hathaway (virtual) meeting? He reiterated one of his long-term core beliefs: “Bet on America”, but he is not doing so in a cavalier fashion. He continues to sit on a reported $137 billion of cash while looking for opportunities. And what does he do while he waits for opportunities? He reads. Voraciously.
Maybe that’s my takeaway in a nutshell: be voracious in your appetite for knowledge and planning. I’ll be doing the same.
Remember: we don’t have to be the smartest, just smarter.
June 2020
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
