Lessons Learned From a Basement

I started working from home late last week, for the first time in my career, and little did I know I’d go on an incredible journey in just a few days. When we look back at this time period it will be with awe, sadness, incredulity, and solemn reverence. The things we are learning about ourselves and the World will forever shape the rest of our lives. Let me pass to you a few of the lessons I’ve learned on a laptop in my new basement “office.”

  1.  You have to pick a side in life. Big picture…long term….you are either an optimist or a pessimist. A helper or a complainer. A bull or a bear. In extraordinary circumstances it’s important to define who you are so you can get to work. The first question you should ask yourself is this: Will humanity win, will we persevere over this virus? Only after answering that can you move onto other decisions. I believe we will, I’m an optimist, and I will be a helper to my firm and our clients EVEN as I acknowledge the challenges we face right now (a bit of realism).
  2. Make your move and sleep at night. Investing, for as complicated as it can be, is all about you and your own time horizon, no one else’s. What you see in the news and on TV is someone else’s game so why do you care? Studies have shown people with advisors do better in times like these than people who go it alone. Why? For a multitude of reasons but mostly because they have someone alongside them to remind them that their game, their home field, is what matters. That their actions, right here during March of 2020, will determine their success at reaching cherished goals.
  3. Look at your results and recalibrate if something is wrong. You want to know how diversified portfolios are doing thru the worst selloff since the Great Depression? They’re doing fine.  My friend Ben Carlson looked at their performance on March 23. A 50/50 Stock Bond portfolio (on March 23) was down 15% YTD. A 100% stock was down 30.8%. This is the WHOLE POINT of a well-diversified portfolio. If you look at your allocation and you can’t stomach it then you’ve learned about your risk tolerance. You need to have “impatient money” and “patient money”. Impatient money should be used in the here and now, cash to meet short term needs, while patient is set to ride out storms. Don’t mix the two (this is a failure of a great many investors)
  4. Focus on what you can control. Here is what’s under my control A) My family’s safety and staying at home B) What I do to support my teammates, our advisors, and their clients C) my attitude D) staying in touch with people I love E) Keeping my spirits up. You know what’s not in my control? The market, the virus, people who are constantly negative, what the government does, or when the Olympics happen. Fear and negativity is as infectious as COVID 19, don’t let it penetrate you. It’s OK to acknowledge how scary this is but focus on what you can control.  
  5. What my son eats. I swear there are not enough snacks in the World to satiate my 14 year old boy. He’s a remorseless eating machine plowing thru Doritos like Homer Simpson through donuts.
  6. The World will be different on the other side. Lots of things will change, some for the better. Watching a first run movie at home is amazing, doing conference calls on Zoom is seamless, drinking coffee in my kitchen and going to work in my sweatpants is liberating to my creativity (I hope my bosses allow sweat pants when we all go back to our desks). Some of Newton’s most profound discoveries happened during the Bubonic Plague, we could see incredible things happen in the next few years.   
  7. Local Business matters. The stock market will survive, big companies like AAPL, AMZN, WMT will be fine, but your local business might not survive. I promise you that the valuations on your favorite restaurant or bar are attractive, support them so they don’t fall into an abyss. They are the heartbeat of our nation, don’t forget them.
  8. Every crisis has heroes, this will be no different. There will be stories told of the heroism of Doctors, Nurses, and Medical professionals that will rival anything you’ve ever read. God look over them, bless them, and keep them safe.
  9. Regular jobs have HUGE importance. Grocery stores, retail workers, pharmacists, the list goes on and on. They might not be super star athletes or movie stars but their importance to our society is immeasurable. Thank you.
  10.  Laughter is a huge part of life, even in Finance. Find someone who makes you smile and hold onto them with both hands. Human beings can only take so much serious investment commentary, I try to balance markets with a sense of humor and I hope it shows. Follow smart people, read good commentary, but don’t drown in technicals.      

Let me end with a quote from my one of my favorite books of all time. The message is timeless and I want you to take it to heart. Read it a few times and let it wash over you.

Frodo:  "I wish the ring had never come to me, I wish none of this had happened"

Gandalf:  "So do all who live to see such times, but that is not for them to decide.  All we have to decide is what to do with the time that is given to us"

J.R.R. Tolkien - The Lord of the Rings