The Force

Star Wars Episode 9 opens today and finally ends a 42-year story that quite literally changed the World. If you’ve been following me for a while you know that there are things sacred to me: Patagonia Vests, Baird, Disney, making people laugh while educating them, a nice bottle of wine, demystifying markets, but most importantly a fierce love of the Star Wars franchise. As a child of the 70s, Star Wars movies have been with me my whole life, it’s a saga that spans decades enjoyed by people around the world. Good, evil, the Empire, the Rebellion, droids, ships, creatures, all surrounded by something called “The Force”. Jedi’s use the Force for good, Sith use it for bad, but the Force (when used correctly) allows its user to find peace, strength, and serenity among endless noise and chaos in the Universe. You know who used the Force for good this year? Average ordinary investors like you and me. Allow me to explain why.

Star Wars movies are a lot like investing over the years. Some good one’s (Return of the Jedi, Force Awakens, Rogue 1), some mediocre one’s (Revenge of the Sith, The Last Jedi, Solo), an occasional home run (A New Hope, Empire Strikes Back), and a few disasters (Phantom Menace, Attack of the Clones). You have to take the good with the bad and when you reach the end (Rise of Skywalker) realize that nothing turns out exactly as expected. You have to suffer thru Jar Jar Binks to get Han Solo. Investing is no different.

There were quite literally dozens of reasons to sell stocks in 2019, just think back to how we started the year. The end of 2018 featured a gut wrenching 20% decline and as January was born it felt like entering a football game after having multiple concussions. Strategists were telling people to underweight stocks, the end of the Bull Market seemed near, and investors thought the bounce in January was a trap! (you’re gonna love that chart). Economic data slowed, earnings growth slowed (even went negative in Q3), private markets seemed to peak with the WeWork implosion, a President was impeached, and finally Trade War headlines raged on and on. Yet investors cared not, they crossed their legs, closed their eyes, and used the Force to ignore all that swirled around them. My friends the lessons of this year are numerous and primal. How effectively you shut out that noise directly determined your success in 2019, a year that will likely end up as one of the best in history. Look at the return of some popular names this year, names everyone knows. Disney, the company that owns Star Wars, saw its stock soar 33% this year. Stunning.

I can’t emphasize this point enough. No one knows where the market is going, NO ONE. There will always be a reason to sell (@MichaelBatnick has a great chart about this), there will always be volatility, but how you act amongst all the uncertainty is what will determine your success as an investor. Remember: volatility is your PRICE OF ADMISSION to equity returns, if you can’t stomach the moves than maybe you need to rethink what you’re holding. Did you miss a good chunk of the markets +27% return in 2019 because you got scared by all that noise? Did you try and “time the market” by jumping in and out between 2018 and 2019? Maybe you need help with investing. I know a good place to start, right here. Come talk to our Jedi Advisors and get the wisdom you deserve. 

Ill end today with a 3 minute 34 second scene that is undoubtedly one of the best in history. The lessons taught here work not only in the movie but in our own lives. I mean how amazing is the writing and the music in this scene? Absolutely timeless. Chills even 36 years later.