Views from the Crowsnest Nov 21 2018

“If you can keep your head when all about you
Are losing theirs and blaming it on you,”

Welcome to this special edition of Views from the Crowsnest on November 21, 2018. The quote above is the first two lines of Rudyard Kipling’s classic poem, “If.” It fits today, in ways both obvious and subtle. In these moments, our higher-order executive functions become more important than ever.

Rarely are we in the midst of historic events with a conscious awareness of their significance. Today is one of those rare occasions when we witness the collision of trends and forces so obviously converging; cinematic in their scope, with life-changing consequences for those directly in their paths. We knew it would eventually come to this; it had to. And then there are the ripple effects on the rest of us.

Exact outcomes are still unknown, but the meta-trends make the overall path inevitable, unchangeable and necessary, by force of nature. Such is the nature of recurring cycles, in politics, economics and markets. This is the just and necessary consequence of all the decisions that have led us to this moment.

I refer specifically to the challenging equity market machinations since September, but more broadly to the tectonic events unfolding in and around Europe. The cradle of western civilization is bringing us timeless lessons of the immutable laws of nature: physics, power, populism, psychology, economics, envy, manipulation of the many by the few, and the eventual awakening of those charged with decision-making authority. And the uncovering of secrets long kept through convention, personal utility, and fear.

As if “magically,” Martin Armstrong’s Economic Confidence Model (ECM) once again targeted today (2018.89) as a key date in the future of our institutions and the societies over which various levels of influence and control are exercised. Today is a rare “Pi Day” ,served up for all to witness and ponder. As Marty likes to say, “There’s order within chaos,” but we need to transcend the noise to understand the true big picture before responding to the noise and distraction on the ground. The imminent release of the Socrates Trader-Pro Level will be warmly welcomed when it happens.

Having attended the World Economic Conference 2018 in Orlando – my 4th – followed by a couple days of coastal relaxation and celebration, today we witness major events unfolding with Italy and the EU, the UK and its inept attempts at breaking away from the EU, and what will be a resumption of the most hated bull market in stocks ever…literally by force of nature.

Human history is a rhythmic poem describing the desire for liberty offset by the need for structure. Jordan Peterson describes this as the battle between Chaos and Order. Sometimes the weight of too much order becomes unbearable. Sometimes an unbalanced economic relationship reaches it inevitable end. Think Italy and Brexit.

These tectonic, structural changes lead to fear, uncertainty and doubt around the world. When market makers, traders and high-ranking decision makers get caught up in the drama and tension of the immediate situation (i.e. they LOSE their heads), we all feel the impact via declines like those which have recently buffeted our financial portfolios. This is temporary, not permanent. We know because we have the gifts of perspective from those whose systems and experience have washed away (fear-based) emotional REACTION, and given way to wise and prudent RESPONSE.

What does it all man? Capital flees risk and seeks opportunity. The bigger the systemic risks (Europe), the more violent – and unsettling – the temporary dislocations are, even as capital arrives on safer shores (U.S.). We are all more closely wired than ever before. The downside is a loss of true connection, but that’s a story for another day.

When we look back, we know that market panics pass rather quickly despite being so very painful when we’re swirling in their midst. This too shall pass. Thanks to wise counsel and humble recognition of those who know something we don’t, we remain steadfast in our view that this – the longest and most hated (ever) Bull Market in stocks, especially in the U.S. – remains intact.

There is major support not far below current levels. Even if we test these support levels, the tests will be temporary. Our Portfolio Managers hold some cash for buying bargains, non-correlated debt instruments for diversification and stability, and great companies trading at (or slightly below) their intrinsic values. They remain calm, focused and patient…ready to act decisively when fear is highest and risk therefore lowest.

To our Clients Families we suggest adding to your portfolio if you have cash available for longer term horizons; essentially be an Opportunist. Otherwise, do nothing right now because it would be financially self-destructive; impulsive moves now are giving into fear which turns us into Victims.

We have your back. We are keeping our heads. I recommend reading the entire text from Kipling by clicking here.

Patience and Discipline are accretive to your wealth, health and happiness – so focus on these.

Cheers,

Andrew H. Ruhland, CFP, CIM
Founder, Integrated Wealth Management
t: 403-517-2234