- “…Stock Market Tanked”
- “…Great Bubble May Be Starting to Pop”
- “Is a New Global Financial Crisis Developing?”
- “Oil Crash: A Result of Excess Supply or Plunging Demand?”
- “Commodity Binge Decade May Lead to Big Hangover”
- “Global Markets Swoon”
- “7 Charts Show the Market Panic”
- “Silent Crash Is Underway”
I could go on, but I won’t. I’ll leave that to nearly everyone else.
Risks Happens One Way...
…and that’s down. Coming off of a total bloodbath of a week, Friday was an exclamation point on that fact, with the S&P down 64.84 points, the Dow down 530.94 points, and the Nasdaq down 171.45 points. During volatile times like these, we need to take a breath and carefully consider what is influencing our decisions.
Take the headline snippets above, for example. They are all snippets from the titles of one of my favorite content curators, Real Clear Markets. The team running the site is great: they’re smart, market savvy, and have parlayed their ability to cut through the crap — giving readers like me the “good stuff” — into a great business.
(As an aside, our paths actually crossed during my days at Forbes. I even got to golf with John and Tom once, but I digress…)
That said, any content curator only has to pick from the world of other people’s content.
Markets Turn on a Dime
In a world now driven by clicks and eyeballs, and a market that has long been influenced by fear and greed, the ability for the media to influence the masses is greater than ever. Both in fearful and greedy ways.
The key is to understand, and embrace, that your environment controls you. Therefore, you need the discipline and investing intestinal fortitude to control what you can in order to truly put yourself in the mindset of a long-term investor. You might recall a Premium piece I penned a while back titled, Repeat the Repeatable.
In the piece I detailed a super investor of sorts and the lengths to which he goes to a) recognize that his environment controls him and b) take the steps to control what he can within his environment.
Three Things Guy Spier Does That You Don't
To be honest, I’m not suggesting you go to the lengths Guy Spier does to insulate himself and give himself “space”, both physical and metaphorical, to focus on long-term investing. But as you might recall, there are three things that Spier does/has done to accomplish his investing zen:
- Spier removed himself from the hyperactivity of New York City and is now based in Zurich (this echoes Buffett’s belief that he can think more clearly while in Omaha, Nebraska, as opposed to “the center of the universe”).
- Spier checks the prices of his stock portfolio no more than once a week. That’s amazing discipline for someone who is managing money for others, and rings true to Buffett’s idea of “what would you own if the market closed for five years.”
- He never talks about any of his holdings to others as he feels it may infringe on his objectivity towards the holding. This includes his investors.
What Not to Do After a Tough Week
No doubt all of our portfolios got beat up this week. Chatter of a correction has gained traction to a bear market as fast as only a raging wildfire in a bone dry region on a windy day can. That said, I urge you to think about what you’re doing during volatile (down) weeks like this. Are you looking for article after article pontificating for as low a number on the Dow as you can? Is that helpful? My answer is no.
Is there more downside risk here? Absolutely. But what we can control is our emotions: fuelling them with speculative click-bait fodder is never helpful. Let’s digest what’s happened this week and remain the research, stock-picking, fundamentally-driven investors we are…
…despite the non-stop salacious headlines.
Have a great rest of your weekend and talk to you Monday!