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.
1. Delmarva Power. There’s an issue with my power bill. I called their “customer service” number Monday night and was met with a 50-minute estimated wait time. That’s not going to happen, so I called back Tuesday morning. The wait time for that call was a sleek 27-32 minutes. They split the difference and I waited half an hour to be immediately told by the CSR that the system is down and they can’t answer any questions. They did offer to call back when their system is up, which is fine I guess, but what I really want is to determine when I talk to my vendors myself rather than sitting around looking forlorn like a 14 year old girl waiting for her true love to call. After blasting them on social media, someone did reach our to me and promised I’d get a call back “sometime” in the “next few business days”. Fifty hours later. Still waiting.
2. Staffing. In order to send any information outside the organization you need approximately 4,587 separate lines of approval. It’s not necessarily hard work, but it is what some might call tedious. Reaching the point where something is approved for release always feels like something of any accomplishment… but the best part is when you get something fully staffed, vetted, socialized, and approved only to be notified two hours after you hit send for the final time that someone at Echelons Higher than Reality has decided to “go a different direction.
3. The sky is falling. Look gang, I’m not a fancy big city investment banker, but despite the thrashing Wall Street has taken this week the sky really isn’t falling (yet). The Dow made its high in May of last year. We’re down in the neighborhood of 10% off that high – that’s the operative definition of a correction – but still a ways off from a bear market. If you haven’t jumped out well before now, the only thing cashing out in this market does is lock in whatever loss you’ve suffered. If I were in danger of retiring next year I’d be a little more worried. As it is, I’d say it’s time to stack some cash and do a bit of hedging. If that doesn’t work for you, just win yourself a Powerball Jackpot and you’re all set.
In the first ten minutes of trading this morning, the Dow sloughed off over 1,000 points. Let that sink in for a minute. 1,000 points, by anyone’s calculation, translates into the evaporation of serious wealth. The only good news on the day that I’ve read is that it didn’t stay down a thousand. It’s a strange day, indeed, when the good news is that we kept the hemorrhaging to something under 600 points.
I’m as if not more risk tolerant than most when it comes to investing, but today had me following the rest of the herd and plowing everything into the (relative) safety of bonds in an effort to preserve principle rather than chase future performance. We’re in correction territory here… and definitive “bear market” status isn’t too far off – especially if we find another trading day or two like we’ve already seen this week.
Still, although this is big news and I find it all delightfully interesting from an academic perspective, I don’t think the sky is falling. I’ve got a mercifully long horizon before I’m going to need to dip into any of the funds I’m trying to diligently shepherd along. Nineteen years is an awfully long time to see the market surge and fall and surge and fall again and again before I need to worry. That being said, I would like to get through this mess quickly and find a bottom so the boys on the street can get back into the business of making money for all of us instead of finding new and creative ways to shelter and protect what we have already.
Today was an impressive example of the market’s ability to crush it on the way down. I don’t need to see them crush it on the way back up, but a little stability after a rapid downhill ride would be greatly appreciated.
I’ve been told that some people can get through a week without being annoyed by anything. Those people are apparently suckers. Want to know what annoys Jeff this week? Here they are, as always, in no particular order:
1. The Maryland Transportation Authority. A week after the news from Annapolis reported Maryland’s budget was in surplus this year, the board members of the MTA unanimously voted in favor of the largest toll increase in the state’s history. Nice move asshats.
2. 30-somethings who complain about the stock market dropping. If you were 60 years old and contemplating retirement, you’d be right; a declining stock market would profoundly suck. If you’ve got 30+ years before you can even reasonably contemplate hanging up your career, the bottom falling out of the stock market is the best thing that could happen for you. You see, the whole point is to buy low and sell high. In case you’re wondering, this is the “buy low” part.
3. People who think that a satellite is going to fall on their head. OK, I’ll admit that a bus-sized satellite is hurtling back to earth, but A) It’s most likely to come in over South America (i.e. it’s someone else’s problem) and B) Even if it were coming in directly at the good old US of A, what do you realistically thing that chances are of it falling directly on your head? For you as an individual, the odds are 1:21 Trillion in case you were wondering. Please perform an immediate reality check and then go sit quietly somewhere.
4. Douchebags who hike near the Iranian boarder. You know what? You deserved to go to jail if for no other reason than being stupid. At what point did setting out on foot anywhere close to the boarder of a nation that’s a sworn enemy of your country strike you as a good idea? Well, two years later, I guess you could say lessons learned. In this one case I’m in the incredibly uncomfortable position of thinking the Iranians did the right thing.
1) The price of gas. Yes, it’s $3.20 a gallon. It is what it is. Instead of bitching about it when someone shoves a camera in your face, maybe you should consider trading in the armored personnel carrier you use to take Bobby and Katie to soccer practice and get something more efficient. Otherwise, suck it up and pay the bill, sweetheart.
2) The “outrageous” cost of healthcare. You’re paying for a service. If you don’t like the going price, find a cheaper service or try just going without and see how that works out for you. Some things are worth a premium. Living is one of them.
3) The stock market “collapse.” I don’t know what economics or finance classes you took in college, but I distinctly remember learning that the price of stocks moves in both directions. If you were so heavily invested in one thing (i.e. stocks versus bonds versus gold), you need to learn about diversifying your portfolio. The market is doing what it does. I didn’t hear anyone bitching when it was soaring past all reasonable expectation.