10 Years Since The Low
Equities start the day slightly higher on the 10 year anniversary of the 2009 low. 666.79, I mean can you even make a number like that up? There’s no doubt that the universe has a sense of gallows humour. Anyway, there’s a great many things I remember about that time period foremost of which was my Dad calling me up asking if he should sell Wells Fargo at $8. I recall saying to him “if you think Wells Fargo is going lower from here you think the entire Western banking world is a zero and that the future of our economy is trading rocks and yarn animals for milk”. Fun times. You know when I look back at my behavior in that moment I think what saved me was (and this is gonna sound crazy) being kinda clueless about investing. I was 36 years old, I had been working at Baird for 2 years, I had a 3 year old boy and a 1 year old girl so I just kinda went to work and did my thing helping clients all while ignoring my Battle of Iwo Jima 401k. I mean I was 36, I had 25+ years to retirement, what changes was I going to make that would help me reach my goals? None, zero, in fact I only could’ve hurt myself had I reacted to the moment. Morgan Housel said “your lifetime results as an investor will be mostly determined by what you do during wild times” and he’s spot on correct. So how did you act in December of last year? Poorly? Did you make rash decisions? If so then you can see how valuable an advisor can be. I mean I didn’t intend to turn this into a pitch for advisors but hey, that’s where I ended because their value in those moments is IMMENSE. Speaking of advisors, one of my good friends here who just so happens to be one said during the worst moments of 2008-2009 he had to turn to making people laugh to keep them sane. I absolutely love that and if anything crazy like that happens again I’ll be here to help but also to make fun of stuff like this. WHAT THE HECK HEINZ?!? THOSE ARE SO BAD. Dear $KHC marketing team: hit my email if you want better ideas than that.
After the open it didn’t take long for stocks to turn south and we spent the entire first half grinding lower. Man did we reject that wall or what? Here’s how I see it right now: there’s two distinct camps and maybe one camp that unorganized. The two distinct camps are “Due for a Pause” and “Retest the lows”. The unorganized camp that can’t manage to pitch its tent is “New Highs soon”. Certainly the fact that we’ve bounced this much has raised bullish sentiment, I’m not discounting that, I know people have turned bullish with price, all I’m saying is that “new highs soon” really isn’t mentioned that often in daily notes or strategy pieces. Regardless, I’m definitely in the “due for a pause” camp (as are MOST people) and when I see what Transports and the Rus2k are doing I’m ready to start unpacking my rucksack. I mean how often can we rally on “China trade deal optimism”?? Gimme a break with that already. But if most people are in “due for a pause” and only a few are in “new highs” does that make “retest the lows”, a camp only Perma Bears are in right now, something to worry about? I guess only time will tell. Winners were LYB, DLTR, AON, MO, and ATVI. Losers GE, WLTW, BF/B (but Jack Daniels is GOOOD), and MU. By lunch we were near the lows, 2,773, down half a percent.
The rest of the day saw a grindy market that never picked up its head and a close at 2,771 down 0.65%. So it’s been 10 years since the low and a lot has changed (h/t RY). What hasn’t changed is the fact that our nation has an incredible future. Even when we are struck by a crisis, or an event that rattles our faith in the system, Americans come out stronger and more determined. The GFC could’ve ushered in a Depression but it didn’t. It could’ve ushered in a run on our financial system and a collapse of our economy but it didn’t. Americans get knocked down but they always get back up ready to rush headlong into the future. See this video? See how that number just goes up? That’s why people pour their life savings into this wonderful place, because no matter what party we belong to, or what our beliefs are, we all share a common goal of seeing this great nation of the people, by the people, for the people….THRIVE.
Final Score: Dow -51bps, S&P500 -65bps, Nasdaq -93bps, Rus2k -201bps (UGH)
- Succinct Summation of the Day’s Events: There isn’t much fresh news, the market appears to be pausing after it failed to breakout above 2800. Rus2k and Transports pulling us lower.
- Nick says that markets have no laws, only tendencies. The best part of his article is at the end: “You can use all the numbers, tables, and data visualizations you want, but you still won’t be able to quantify the only law in investing: everything is determined by your own behavior. Everything comes back to how you react to information. This isn’t about numbers, it’s about psychology. It’s about how you react to losing 10%, 20%, 30%, etc. It’s about how you control your emotions on the upside and the downside. It’s about imaging an event outside of the parameters of your experience. This isn’t easy, but it is necessary”.
- Dear leaders of Baird (and other companies) avoid these things: “there are things in business and investing with no offsets – bad events with no stabilizers, no equal and opposite reactions to that seed an eventual upside. They are pure downside, no silver lining. They belong in a folder labeled, “Do everything you can to avoid these.”
- Tuscany can’t be this idyllic is it? I mean….it’s that pretty AND has pizza? My god
- My heart…it can’t take stuff like this
- Or this
- Where was something like this when I was a kid?
- Beef stew with cheddar herb dumplings. You gotta get on my level here
So every time my wife and I sit down to watch a show on the nature channel a muskrat or a random lemur gets eaten by a Tiger and she breaks down into tears like she just heard Amazing Grace played on the bagpipes. It kills me. So this link is for her….animals winning!! (the elephant at the end is my hero)
Have a good night