It’s the oddest tree I’ve ever seen! It looks like it is straight out of Dr. Seuss’ The Lorax. Its branches defy ordinary contexts of what we think is a tree.
Last month, Kim and I took an active trip to hike and climb in and around Joshua Tree National Park.
The weather in the Mojave and Colorado deserts was cool and sunny. Perfect for being active. Honestly, I’ve had this sort of guilt for the last decade surrounding this National Park. Many years ago, the four of us spent a quick day touring the park as part of a greater road trip. In my odd way I felt like I kind of disrespected it. This park deserved more from me. It deserved more days, more time, more attention. Yes, more depth. Not just a cursory swing through to check it off my list of visited National Parks. So, off we went.
As a climbing guide took the time to describe the Joshua Tree in detail to us, I thought that the comparisons between stocks and Joshua Trees are undeniable.
Joshua Trees only grow in the Mohave Desert from elevations from 1,300 feet to 5,900 feet. In their first 10 years, they grow quickly, about 3 inches per year, then slowly. The root system is exceptionally broad, sometimes as much as 36 feet, to collect as much of the only 5 inches of annual rain. They do not grow new branches until after they bloom. But blooms don’t happen every year. Blooming depends on scarce rainfall like most desert pants. They also need a winter freeze to bloom. They have so many impediments to overcome. They must be resilient, efficient, tough and persevere even in the most difficult of climates.
I think about our current stock market climate.
The “Tariff Tantrum”, interest rates, confusion, uncertainty, rapid change, massive government debt, and on and on and on have caused many undulations in stocks. So, stocks, like Joshua Trees, must be resilient, efficient, tough, and persevere even in the most difficult of climates. This “Winter” period will necessitate some pruning. Companies will need to rely on their deep root system to survive this time in the desert. They are compelled to become more efficient. This prepares them for the eventual bloom and further growth in the future.
Keep the faith. History shows us that periods of uncertainty are followed by new growth in the capital markets. Call us if you would like to discuss this further. We are here for you!
May 2025
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The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.