Twenty-five months have passed since I last wrote in this format, and it feels like a lifetime ago. Life is what happens while we’re making plans, as they say.
Rather than attempt to re-live, re-frame or re-litigate the last two years of our upside-down world at a granular level, I’ll be as succinct as I can muster; I’ll revert to being annoyingly practical and direct – for which I’m rather infamous. Hopefully muscle memory will kick in without significant injury.
First things first. For any of our clients concerned about the impact of the significant declines in major stock and bond markets this calendar year, I have two suggestions to provide essential context: 1) compare your relatively minor portfolio declines to a fair weighted benchmark, and 2) let’s re-connect in person or on Zoom to update your financial plan. 1) above will demonstrate the excellent risk management skills of our portfolio managers, and 2) above will show you the impact – if any – on your most important financial goals. Please reply to this email when you’re ready to schedule an update of your family’s plan.
The late great Jim Dines made an indelible impact on my understanding of mass psychology regarding human behaviour in markets. One of his most profound observations was that the masses are – by definition – wrong at the extremes, but they help create the trend in between.
Today we find ourselves pondering the world’s financial future with such a pessimistic bias that I find it rather comforting. Thursday May 12th sure looked like a bottom on North American stock markets, with an encouraging positive follow-through the next day. Perhaps the first Friday 13th of 2022 will be a lucky day for a change?
Dr. Jordan B. Peterson is arguably the most important public intellectual in today’s anglosphere. Amongst his seemingly endless string of pearls of wisdom, is this: it’s much easier to destroy things than it is to build them up, so be careful about following through on the calls from hysterical mobs screaming incoherently for the destruction of our way of life, including our major institutions.
This principle led me to craft the following idea: when public policy decisions are ideologically driven rather than practically driven, things go wrong quickly. Our modern world is – quite obviously – a series of complex systems, which are fragile by their nature, e.g., the last two years of supply chain breakdowns. Poorly thought-out policy decisions are disastrous for all complex systems, with sanctions being the worst.
The last 26 months have proven beyond all doubt that hysterical idiots have been in charge of all important public policy decisions. Regardless of party affiliation, every politician and public health official followed and repeated a singular narrative. The clapping seals in the mainstream media behaved as stenographers rather than as journalists. Dissenting voices from practical people were dismissed with smears and vitriol.
In retrospect, I’m not certain they got anything right. In fact, I can’t imagine they could have done anything more wrong or created more disastrous outcomes. From lockdowns, social distancing, forced vaccinations despite a very low fatality rate all the way to cancelling Keystone XL and federal drilling leases…it’s been nothing less than a total clown show. Civil liberties remain trampled, especially here in Canada. And now these “geniuses” have created a very plausible path to global war. The world is bereft of peacemakers, but full of warmongers!
Thankfully the markets have already priced in these obvious missteps, so perhaps we can move forward with re-building that which needn’t have been broken. Yes, I’m hopeful again…mostly because almost no one else is. And our portfolio managers are calmly sifting through the market carnage and adding to their collection of quality companies that have been unfairly discounted.
Clients, we look forward to re-connecting shortly. And for those who aren’t yet clients, we’d be delighted to see how we might be able to serve your family.
Patience and discipline are accretive to your wealth, health and happiness – so focus on these.
