Looking at the various trackers I use to keep tabs on “money stuff” it appears I’ve clawed back somewhere around 80% of what was lost when the floor fell out from under the stock market during the opening days of the Great Plague. I wish I could take some kind of credit for having a shrewd financial mind. It has far more to do with being willing to just stand there and take a beating without locking in all those losses by fleeing to the safety of cash equivalents… though I suppose sitting around watching the market erode your nest egg day after day after day without screaming “uncle,” is a certain kind of financial bravery of its own.
I’m happy to see a lot less red ink on the page, but I’m not even cautiously optimistic of the market’s ability to hold on to its gains in the absence of the truly massive amount of money the Federal Reserve has pushed into the system. Until I start seeing unemployment numbers normalizing, consumer confidence picking up, and a reckoning about how the foreclosures and evictions that have been held in abeyance for the last few months will be addressed, I won’t be convinced it’s not an aberration.
Call me a pessimist, if you will, but aside from there being a nice blue sky and sunshine overhead I don’t see how or where we’ve really turned a corner – and I’m fairly sure the economy doesn’t turn on how pretty a day it happens to be outside. Then again it’s possible I have completely lost track about what it is that actually does drive the economy. So much seems to have changed since I took my basic classes twenty years ago… or at least we’re pretending they’ve changed right up until the old rules jump up and bite us in the collective ass later this year.
1. The NeverEnding Project. If it weren’t for the Great Plague, I’d have had this particular project behind me for almost a month now. Instead, though, it got delayed, deferred, and then converted to an “online experience.” A better man than me might be laser focused on delivering a world class product – or at least be interested in something beyond the minimum acceptable standard… but honestly, my only objective is for this time-sucking vanity project to reach its long-suffering conclusion, regardless of whether it’s good, bad, or mediocre.
2. The market isn’t the economy. A million years ago, when dinosaurs roamed the earth and I was a youth, an obscure southern governor won the presidency on the back of the mantra “It’s the economy, stupid.” Despite the easy money propping up the stock market right now, I have to think that underlying economic conditions driven by our response (or lack thereof) to the Great Plague will be what drives Election 2020 as we draw towards November and people broadly start paying attention to electoral politics. My take, bound to be unpopular in MAGA circles, is that if the Republican Party wants to maintain any relevancy in the next four years, it’s time to focus all our time and money on holding on to the Senate.
3. Complaints. The number of things I do on a weekly basis because “if we don’t, someone might complain” should be disturbing. Doing things just so MaryJane Douchebag doesn’t open her yap just doesn’t feel like a good enough reason to do something that you wouldn’t otherwise do. No one (except me) seems to find it disturbing, though. I have no idea when we became a society that spends so much time worrying that someone might complain, but here we are. It’s dumb, I hate it, and it’s just another example of how the 21st century is absolute trash.
Anyone following the markets this week already knows that they took a beating. Global stock markets are down across the board, a fact mostly attributable to at least some level of panic about what coronavirus will mean to the overall global economy. Markets hate uncertainty and that seems to be what we’ve had from all directions for the last few days.
Because I do want to retire some day, I’m not immune to keeping one eye on the business channels throughout the day. Days when I’m tempted to panic I find it helpful to remember a couple of things: 1) In the short term stock markets always move in two directions; 2) Trading based on emotion is stupid; and 3) Over the long term, the market has never moved in any direction but up.
Sure, when you’re sitting around watching tens of thousands of dollars of savings disappear, there’s an undeniable instinct to try to save whatever you’ve got left. That’s the emotional response. The logical response, of course, is not making those losses permeant by selling into the teeth of such large moves.
I’ve got fifteen years left before I’ll need to touch anything that’s currently subject to the vagaries of the stock market. The sane, rational part of my brain knows full well that fifteen years from now the prices today are going to look like an absolute fire sale compared to where they will be then. I’ll keep plugging my cash into a well balanced mutual fund every two weeks and let history be my guide. If I were planning to retire at close of business today, of course, I’d probably be a bit more wild-eyed in my estimates, but I like to think even then I’d manage to let sanity prevail.
The day I start betting against America and against the long track record of capitalism creating real wealth over time, you might as well put a fork in me. I’ve bought the ticket and I’m taking the ride.
1. “Blood in the street”. The first financial news I consciously remember hearing was during the great bull run of the 1980s. In January 1987 the Dow cracked 2000 for the first time. I was eight years old and heard the news that day in my grandparent’s living room. Today, 30+ years later, after a two plunge, the Dow stands at 25,052.83. I’m not a financial expert by any stretch. I’m not a stock picker. I pay a limited about of attention to broad trends because I do have a vested interest in being able to retire at some point in the middle-ranged future. What I’ve learned from keeping an occasional eye on these trends over the last 20-years of having a small dog in the fight, is just this: prices go up, prices go down, prices go up again. Wash, rinse, and repeat. Yes, I hate seeing account balances bleeding away as much as anyone, but the blood in the streets reporting from major news outlets feels completely overblown.
2. “California is underrepresented.” I’ve seen it a few times now – the “infographic” that shows California has only 2 senators while the 7 least populous states in the west have 14. The conclusion is that Californians, therefore, are underrepresented. They conveniently fail to mention that the same seven states are represented by only 13 representatives in the House while California weighs in with 53 members of that august body. Such posts, of course, neglect to discuss the intricate system of checks and balances designed into the Constitution – where the House of Representatives was designed as the direct representatives of the people and senators were elected by the state legislatures for purposes of representing individual state interests within the federal framework. You could almost be forgiven for believing that the United States was a democracy and not a federal republic. After all we so regularly and incorrectly use the words republic and democracy interchangeably. It’s safe to say that the founders knew a little something about mob rule and its dangers to good order and civil society. The whole massive machinery of federal government was designed, in part, to ensure that radical change couldn’t be rolled out across the country at the whim of the mob. Rest assured I’ll be at least one consistent vote against dismantling any such bulwark restraining the passions of a would-be mobocracy.
3. Reply All. Sometimes an email gets out by accident, launched across the ether using a distribution list that sweeps up all people, everywhere regardless of whether they need the information contained in the message or not. Here’s a helpful tip from your kindly Uncle Jeff: If you receive an email message via distribution that’s obviously not meant for you, you can literally just delete it and the offending email goes away. Or you and 27 of your closest friends can “reply all,” ask to be removed from the offending distribution, and be revealed as the enormous twatwaffles that you are. I mean I know from personal experience that people barely read the email that’s addressed to them for action. Why in seven hells the reply all is the one they choose to engage with is just simply beyond the limits of human understanding.
I spent some time this weekend updating the financial tracking software I use. It’s not quite the elegant solution I’d like but it does give me real time, at a glance visibility of everything from credit cards to mortgage debt to retirement accounts. If you know where you’re trying to get, I’ve found it helpful to also know where you’re currently standing. It’s been a years-in-the-making process to find something that would work close to the way I wanted. With the exception of a few loose ends, I’m reasonably happy with how it’s all working.
I try to make a habit of doing monthly review of where things are, how they’re doing, and what could be better allocated elsewhere. What my last half dozen reviews have told me is that despite my friends being sharply divided on the presidency of Donald Trump, the markets are more than happy to have him in the big chair. It’s probably impolitic to say, but with all other considerations being equal, I’m going to generally fall in on the side of whatever is putting dollars in the bank.
Don’t mistake that to mean that I’ve developed a deep, abiding love of Donald Trump. I know this administration has issues, I know the country is wide open to political debate about what we should and shouldn’t be doing, and while I love all of you, regardless of political affiliation, I’m not about to argue with anything that racks up double digit returns on investment and improves my chances of punching out of my cubicle for the last time somewhere close to on time and near target.
I start most mornings with a quick review of the news – usually a scan of BBC, CNN, Fox, Washington Post, New York Times, and London Times. The one thing they all have in common this morning is that they’re screaming the arrival of a new economic collapse. The reader comment sections are even worse. Fear in the market is an ugly, ugly thing.
If I were fifteen years closer to retirement seeing the Dow bleed off 600 points in one trading session might ratchet up my pucker factor a bit. In my experience, though, it pays to remember that in financial markets time is generally your friend. Markets go up. Markets go down. But over the long term the trend has always clawed its way higher.
With six hundred points down I’m looking around the house wondering what I can sell to put my hands on cold hard cash. If I had a big pile of it just sitting around not doing anything, I’d be buying this dip with both hands… because in 20 years no one is going to even remember what a “Brexit” was. It’s one of those times where it really pays to take the long view.
1. Bossing. I don’t like being a supervisor – even when it’s only a temporary expedient. I didn’t like it when I was one and I don’t like it when I get to pretend to be one now. I like it even less when top cover is nowhere to be found. And while I don’t like it, don;t think for a minute that I’ll shy away from making decisions. They might not always (or even often) be the right one, but we won’t flail around blindly in the name of indecision. Mercifully nothing I touch is life or death so the consequences of straying outside some unknown left or right boundary marker are pretty minimal. I suppose they could always throw the job to someone – anyone – who might be more interested or more qualified, but that’s most likely wishful thinking on my part.
2. Email. If you send me an email there’s a better than average chance that it arrived. You don’t need to call me 15 seconds after hitting send to ask if I got it and then ask me to opine on the topic of your inquiry. The fact is, I wasn’t sitting at my desk staring blankly waiting for your email. I know some people are a bit ADD about checking their email as it arrives. I’m not. I’ll work in whatever issue you have after I’ve reached a suitable stopping point with whatever it is I was working on while your message was winging its way across the network. Even then, sadly, you may not be the most important thing in my inbox. Priority of effort goes (not necessarily in order) to the boss, the uber-boss, echelons higher than the uber-boss, and then, lastly, everyone else. It’s not personal, but I feel like tending to people who have some authority over my yearly performance appraisal first is a pretty good system. Believe me, I will get to your message, even if I don’t consider it as much of a crisis as you do.
3. Millennials who bitch about the stock market. If you have 20, 30, or more years before you plan to retire, a down market is the very least of your worries. In fact, it’s kind of a gift. You’re getting the opportunity to by your shares at crazy deep discount price compared to what you would have paid a year ago. It must be hard to believe, but more shares bought cheap compounded out over the next 30 years is in all likelihood a thing of financial beauty. Sure, it looks like you’re taking a beating on paper right now, but you’re supposed to be playing the long game here. No one loses actual money until the cash out their chips and make the loss “real.” That’s not you, kids. Let your parents bitch about that down market because they’re the ones who are getting taken to the woodshed if they planned on retiring any time soon. For you, my millennial friends, this whole thing could shape up to be a once in a decade or once in a generation buying opportunity, so play your hands accordingly.