A pearl of wisdom,
“For every complex problem, there is an answer that is clear, simple, and wrong.”
— H.L. Mencken
or even two:
“The trouble with people is not that they don’t know but that they know so much that ain’t so.”
— Josh Billings
I think a succinct version of my job description might be stated, “To seek out wisdom and pass it along to you.”
Now before you become distressed for fear I suffer a self-inflicted injury from patting myself on the back, let me reassure you I am not claiming wisdom as my own attribute, but rather I want you to know part of my workday is typically given over to seeking out wisdom where it lives, and then passing it along to you.
If I am not successful in that endeavor (not to be confused with Endeavour, which, by-the-by, I recommend for entertainment purposes – I watch it on Netflix), then some days we will just have to settle for a chuckle or two.
Shining a light on the absurdities in life is not necessarily part of the job; it’s more of a passion or perhaps a calling. My family defines it as an irritation. Semantics.
Before we become immersed in (into?) this month’s rant, please make a mental note to keep this confidential within our immediate circle. I am not sure that LPL hierarchy will be convinced that listening to hour after hour of Milton Friedman‘s lectures would be considered “work,” but fortunately, I work in an industry, company, job, and situation wherein the company judges my performance by what I produce, and not by what I appear to be doing at any given moment. My workday has much in common with the aesthetics of sausage making and legislation generation. Rest assured; however, I continue to have faith in the principle espoused by Oscar Wilde:
“Everything is going to be fine in the end. If it’s not fine, it’s not the end. “
This year is challenging for investors (as if all the other years aren’t). No dissension there, right? Okay, we agree on that. Now what to do about it? I try to provide you with good advice and guidance, even haranguing when necessary.
Most of my conversations during bear markets are some version of (a) expressing (genuine) empathy because we all feel bad when our account balances go down, down, down; (b) followed by offering some historical perspective which I find invaluable but I’ve discovered others don’t necessarily find that same reassurance there, and (c) finally offering my standard three-step action plan: (1) Are you on the plan? (2) Is it still a good plan? (3) Stay on (or get back on) the plan. And then, I encourage people to stop listening to the latest podcast presented by Chicken Little. There is a lot out of fear-mongering and bad advice out there, and this isn’t anything new.
But there is lots of good advice out there too. The good news is that in the year 2022 A.D., we have the greatest library ever assembled right at our fingertips (assuming the power grid doesn’t crash because all of America is trying to re-charge automotive batteries in California, nor does Microsoft version Skynet/HAL-2001 become self-aware and turn on us).
I often get the question, “When will we see the bottom of the stock market downturn?”
The correct answer is, of course, “I dunno, what do you think?” This, however, will be less than satisfying to the person seeking a little reassurance and encouragement.
My challenge is to provide that reassurance without providing promises of sunshine and rich rewards that no one can guarantee in this life. I do find reassurance for myself, however, in Milton Friedman’s lectures and Brian Wesbury’s “Monday Morning Outlook.” Both of these economists said, and I paraphrase and greatly simplify, the depression of the 1930s and the recession of the 1980s (Friedman) and the YTD bear market of 2022 (Wesbury) were not caused by failures of industry, but rather by bad government monetary policy and the misguided manipulation of the money supply (M2) by the Federal Reserve.
So, if you’re looking to when the markets might have a little smoother ride on the upside, you might look towards a time when inflation is back nearer the Fed’s target rate. See Mr. Wesbury’s June 21, 2022 article to get a little more insight into that comment.
And remember, if you decide you don’t like the ride at the theme park, it’s always a very bad idea to jump off in mid-ride. Say it with me: Walking good, jumping bad. And then:
Everywhere is within walking distance if you have the time.
— Steven Wright