“In the end, how your investments behave is far less important than how you behave.”

~Benjamin Graham

 

Good Morning,

After doing this for going on 40 years I get concerned that I may become boring.  After all, the lessons learned over those decades are not all new.  Very often, they are the same lesson – repeating in a never-ending process, never to be “learned.”

Interestingly, last year – as the haze of COVID and its related shutdowns was still very thick, the markets “topped” on September 2nd – spending until early November meandering back and forth in a “frustrating” trade range.  It was the season as they say.

Impatient investors squirmed with each headline – certain that soon the floor would drop out.  Waiting for the future to clear was, well, shall we say, expensive.  This year, if one noted, the market also “topped” on September 2nd – and has spent the last many weeks chopping through a very frustrating trade range.  This is not something wrong.

It is a building up of energy for the next leg of the journey.

This is the rhythm of the market.  Relatively normal as so many stats prove over time.

The Real Risk…

It has been noted often that chop, market mayhem, flash crashes, Wall Street gibberish, “volatility” and a myriad of economic troubles always present – is NOT risk.  Those are normal parts of every market.  The patient win over time.  The impatient – very often – sadly, lose.

What is the real risk?  Time.

The time it takes to learn that over time is where wealth is created.  The time it takes to plan, review and stay on track for a goal.  The time it takes to recognize something rather frustrating but true:  In all plans, sometimes you look like you are ahead, sometimes you look like you are behind.  Staying on your path for the fullness of time works better than all the benchmarks and temporary meanderings.

The Crunch

The current highest level chatter is the “inflation monster” released by the COVID shutdowns.  As governments always prove, their vision is shall we say, significantly lacking.  They make seemingly effective decisions, then set orders, then create compliance, then realize there are unintended consequences.

There are now over 100 ships with goods to unload sitting outside the west coast ports.  More to boot on the east coast.  Collectively, over 200,000 trucking / shipping containers stand waiting to be offloaded and moved around the country.  If one fears we are going to get less busy on the way to the new normal, failure awaits.

Sadly, this crunch will be helped to subside the moment DC decides they would like to stop paying people to stay home.  The “bell curve” of cost pressures we are being told is the inflation boogeyman coming alongside the grim reaper is instead a “time and balance” issue – not a permanent pathway to Armageddon.

It WILL help drive more and more manufacturing and supply chain elements back to our shores – so there is a silver lining.

Patience Works…

…even when we have to travel through time windows that feel like it doesn’t…and that my friends, is the tough part.

This time next year, we will be glad that our Fed did not jump the gun.  Ponder this – how many of the government officials who have recently become the crystal ball readers they fancy themselves to be – got rich from being in business?  Very, very few.  Most of them got rich – in a career of “public service.”  When they chatter, as they tend to do, about things in which they have little to no real experience – we must work very hard to look past them – and anything they are suggesting as a remedy.

It is wasted energy to fret over it.

Meanwhile…

Earnings, records, new highs on all fronts

 

By the way, note the 2022 and 2023 data points.  When the time comes, you will be told by experts that the 10% growth rates will be “bad” for us – compared to 2021 numbers.  You will be told it is a slowdown and impending recession awaits.  That will be wrong.

Records will still be getting set – and life will be improving all around us in so many ways it will be hard to count.

So buckle up and hold on tight.  Sometimes the ascent out of these base camp trade ranges can be messy.

Until we see you again, may your journey be grand

and your legacy significant.