As Mark Twain once famously said, “it’s not what you don’t know that’ll get ya, it’s what you know that ain’t so that’ll be your undoing.”
Remember back in 2019, when we were all discussing the coming Pandemic and how it could affect the markets in a negative way? Remember when we concluded that more than likely the markets would retract initially and them catapult ever upward as if COVID were another word for “trampoline”? Remember even further back when we all discussed the possibility of the horrid attacks of 9/11 and we agreed we should prepare for the shock and devastation that would ensue? Oh, even further back, remember when our grandparents in November of 1941 were preparing their portfolios for the likelihood of the Japanese bombing Pearl Harbor.
Yeah….because you had no idea that any of those things were likely.
You see for 33 years folks have been telling me, or more correctly “warning” me to be on the lookout for the Boogie Man they clearly see in the closet. The good news is I’ve never been much for Boogie Men. The best news is that not once, not one single time has the “thing” that I’ve been warned about turned out to be the “thing” I should have been worried about. You see what makes Boogie Men so effective is that you don’t see them coming. What makes market altering events such as 9/11 and COVID well, market altering, is that we can’t predict what Nassim Taleb has taught us all to call “Black Swans”. For those of you have not read the book, the premise is that most people believe that Swans are white. They believe this because you can go an entire lifetime and never see a Black Swan. But the truth is Swans are White, until they are not. Huh? I know, I’m confused now too?
You see over the last few years I’ve heard numerous theories and conspiracies (gotta love a good conspiracy), but at the end of the day as Mark Twain said and I paraphrase, “get on with enjoying a life”. The day is coming when the markets rosy little run will sputter, hiccup and cough. The source of that sputter will for sure not be something you’ve spent the last few months worrying about. It will not be the “fringe group” or the “nefarious politician” you’ve had your eye on. It will be…….gotcha! I DON’T KNOW WHAT! Know that you’ve spent a lot of time preparing to do two things:
Design your finances to get through most, if not all (non end of the world, you’re on your own there) situations we can model historically.
I know you’ve done these things because I’ve done them with you. As I type, 2021 is already out of the gate and headed around the first turn. Soon it will be summer and my hope is that you can all get out and stretch your legs. Go on that cruise, or spend that week in Napa stomping grapes into a fine Pino Noir. It seems (knock wood) that we are getting close to moving past this trying time and on to our strange but normal lives. Let’s move away from worry and get on with the party. As the famous Economist Adam Smith once said and Jim Morrison confirmed, “nobody gets out alive”.