Great Article! I think of put into perspective those downward trends are a relatively short term phenomenon. A true value focused investor really shouldn’t bother to exactly pick any bottoms
Got Goosebumps re-reading Warren’s Op Ed-Hall of Fame Thinker, Writer, Philanthropist, beyond Investor & Businessman. Great piece & so funny the spectrum of human reaction to such adversity! Remember staying the course but being tearful and beside myself as my father also told me to keep the faith in capitalism and be patient as I turned gray that year!
The decline of Summer 2007 to March 2009 was not just a market decline, Conor. People lost their portfolio values as the markets tanked ---> people lost their jobs ---> people lost their income ---> so people lost their homes. You know, those structures in which people live. In a fit of anger and frustration, they raided their homes' premises; absconding with built-in appliances, etc. They allowed swimming pools to fester in its scum. They wiped their feces on their former homes' walls as a statement of... what exactly? --->
And people suicided; a shockingly large number of people killed themselves. Seems they just could not wrap their heads around the carnage their lives had become so why even continue?
People forget this larger narrative. Or they misunderstand what occurred. Or they forget. For present-day investors for whom gains and losses are mere green and red blips on a computer screen, the real-life consequences fail to register. There is good reason the epoch has its own nominative name, the Great Financial Crisis. It was a crisis; it involved people's financial lives and livelihoods; it was massive, as in great, sucking nearly everyone beyond its blue event horizon. I repeat to stress the point: 2007-2009 was not ordinary and not isolated as yet another market pullback. "Move along, folks; nothing to see here."
Most investors do not understand the notion of the hierarchy of asset sales so they are always shocked, startled, frozen in place, while they watch their [financial] world devolve rapidly around them. It makes sense to sell the item you still have - financial assets, even in their diminished value - before it too melts away and you are thrust unblinking into a cold and uncaring world; houseless, cashless, jobless, asset-less. Best keep some liquid assets, no?
Joe Queenan was not alone at the time with his recommendation; he had plenty of company. Tony Robbins (yes, this guy: https://www.tonyrobbins.com/ ) recommended in a 50-minute video he posted in March 2009 on YouTube (for maximum distribution) that everyone everywhere sell everything. I recall thinking at the time, "Who is Tony Robbins to make such a recommendation?" He had then no financial markets acumen, certainly less than Joe Queenan. I watched Tony Robbins's video a second time and witnessed his passion, his belief, his concern, his earnestness, and his lack of profiteering in any way from his recommendation. Joe Queenan is similar. So are many other people who made similar recommendations at the time. Sure there were the grifters and profiteers, often the same people who today render investing simple, always sensible; they always are in control, always dispassionate. The older you become, the more you experience that the market always comes for you, just as life does. So you prepare in advance.
Rather than freeze in amber some person's error, arguably the better article would have been to discover how and when Joe Queenan corrected his error. No one seriously believes he witnessed the past 15 years of market history with his portfolio on the sidelines, 100% in cash, right? Warren Buffett is a smart guy, intelligent as well, and he has financial market chops most investors lack. And yet he too makes dunderheaded errors. He moves on. We all should allow human beings the fallibility that comes with being alive and human - and the wisdom that comes from learning from past errors. Without that process, none of us grow and evolve into better investors. And, of course, better humans.
Beautifully put as always. You are right in that I was a young boy at the time of the crisis. My father actually lost his job at this time (O&G industry) and this proved to be awkward for our family. So, I was aware that something was going down, but equally shielded from the panic by my parents. Lord knows they must have had a closer seat to the show than I; who can only read about this time.
Great Article! I think of put into perspective those downward trends are a relatively short term phenomenon. A true value focused investor really shouldn’t bother to exactly pick any bottoms
Great point, thanks for taking the time to comment!
Got Goosebumps re-reading Warren’s Op Ed-Hall of Fame Thinker, Writer, Philanthropist, beyond Investor & Businessman. Great piece & so funny the spectrum of human reaction to such adversity! Remember staying the course but being tearful and beside myself as my father also told me to keep the faith in capitalism and be patient as I turned gray that year!
Very well said Stephen, glad you enjoyed it!
That Queenan piece is gold.
Timing could not have been worse, haha.
I guess you had to be there.
The decline of Summer 2007 to March 2009 was not just a market decline, Conor. People lost their portfolio values as the markets tanked ---> people lost their jobs ---> people lost their income ---> so people lost their homes. You know, those structures in which people live. In a fit of anger and frustration, they raided their homes' premises; absconding with built-in appliances, etc. They allowed swimming pools to fester in its scum. They wiped their feces on their former homes' walls as a statement of... what exactly? --->
And people suicided; a shockingly large number of people killed themselves. Seems they just could not wrap their heads around the carnage their lives had become so why even continue?
People forget this larger narrative. Or they misunderstand what occurred. Or they forget. For present-day investors for whom gains and losses are mere green and red blips on a computer screen, the real-life consequences fail to register. There is good reason the epoch has its own nominative name, the Great Financial Crisis. It was a crisis; it involved people's financial lives and livelihoods; it was massive, as in great, sucking nearly everyone beyond its blue event horizon. I repeat to stress the point: 2007-2009 was not ordinary and not isolated as yet another market pullback. "Move along, folks; nothing to see here."
Most investors do not understand the notion of the hierarchy of asset sales so they are always shocked, startled, frozen in place, while they watch their [financial] world devolve rapidly around them. It makes sense to sell the item you still have - financial assets, even in their diminished value - before it too melts away and you are thrust unblinking into a cold and uncaring world; houseless, cashless, jobless, asset-less. Best keep some liquid assets, no?
Joe Queenan was not alone at the time with his recommendation; he had plenty of company. Tony Robbins (yes, this guy: https://www.tonyrobbins.com/ ) recommended in a 50-minute video he posted in March 2009 on YouTube (for maximum distribution) that everyone everywhere sell everything. I recall thinking at the time, "Who is Tony Robbins to make such a recommendation?" He had then no financial markets acumen, certainly less than Joe Queenan. I watched Tony Robbins's video a second time and witnessed his passion, his belief, his concern, his earnestness, and his lack of profiteering in any way from his recommendation. Joe Queenan is similar. So are many other people who made similar recommendations at the time. Sure there were the grifters and profiteers, often the same people who today render investing simple, always sensible; they always are in control, always dispassionate. The older you become, the more you experience that the market always comes for you, just as life does. So you prepare in advance.
Rather than freeze in amber some person's error, arguably the better article would have been to discover how and when Joe Queenan corrected his error. No one seriously believes he witnessed the past 15 years of market history with his portfolio on the sidelines, 100% in cash, right? Warren Buffett is a smart guy, intelligent as well, and he has financial market chops most investors lack. And yet he too makes dunderheaded errors. He moves on. We all should allow human beings the fallibility that comes with being alive and human - and the wisdom that comes from learning from past errors. Without that process, none of us grow and evolve into better investors. And, of course, better humans.
Beautifully put as always. You are right in that I was a young boy at the time of the crisis. My father actually lost his job at this time (O&G industry) and this proved to be awkward for our family. So, I was aware that something was going down, but equally shielded from the panic by my parents. Lord knows they must have had a closer seat to the show than I; who can only read about this time.