Mind Your Own Business
I'll never forget 2008. I would wake up every morning hoping for terrible things to happen.
"Unemployment spikes". Great!
"Bear Stearns is gone". Terrific!
"Stock Market has its worst days, weeks and months ever". Awesome!
We were short a lot during that year.
It was my first bear market.
And it really took a toll on me. That was really hard.
I didn't want people to lose their jobs!
I didn't want the stock market to crash and have everyone's retirement accounts get wiped out.
Why would I want real estate prices to crash? A lot of my friends and family owned real estate.
But that was my bet.
So if my money, and my clients' money at the time, was positioned for disaster, why wouldn't I root for that outcome?
I'm telling you, it wasn't an easy position to be in.
You learn a lot about yourself during those experiences. And I certainly did.
But here's the thing.
I already knew that about me. I knew I was a good person. I knew I just wanted good things for everyone and for everyone to be happy.
That's just natural to me.
So recognizing my emotions was just further confirmation of all that.
Which is fine, but not the big lesson.
What I DID learn was about how the market works. It's how life works.
I have no control over what happens in the market. I don't have a say in the matter.
The S&P500 could triple from here. I don't get a vote. Gold could go to 10,000. Or zero. The market doesn't care what I think.
I also can't control how other people are placing their bets. There's nothing I can do if a family is investing in the S&500.
If a hedge fund manager, or Pepe in the corner, are short Tesla or AAPL or Bonds, there's nothing I can do about it.
Investors are going to do what they want to do regardless of whether I agree it's a good idea.
When I buy a stock, I can't help it that someone else is willing to sell it to me at that price. I think it's a good idea to buy, the counter party thinks it's a good idea to sell.
That's what makes a market.
If I'm short the S&P500 and it loses 30%, why would I not be pleased with that outcome?
Can I help it that it costs others money, and potentially wiped many of them out completely, because of their use of leverage?
No.
There's nothing I can do.
When a stock I own rips, and someone else is short, I win. They lose.
Why is their loss my problem?
I own my home. I would like home prices to go higher. (I don't think they will, I'm actually trying to short the value of my home, but that's another blog post for another day).
Now, if home prices do increase in value, I win as the home owner right?
What about the families who are trying to buy a home, and it makes it harder for them to afford it?
Does that hurt them? Yea.
Am I winning while someone else is losing? Yup.
In all of those scenarios where I'm winning, there is someone else likely to be losing.
In fact, the more I win, the more likely it is to hurt someone else even more severely.
There's nothing we can do about how the markets work.
No one said it's fair.
The market is unfair to all of us in many different ways.
We know that going in.
So therefore, I have 2 choices:
I can take my ball and go home, and not invest in the market at all.
or
I can get up, put on my big boy pants, and go out there to make money so I can help my family.
You can do what you need to do to make you and your family happy.
I'm going to get in there and fight every day trying to get paid so I can put food on the table for mine, a roof over their heads and maybe a good steak and some wine every now and again ;)
You see, bear markets tend to bring out some of the worst in people.
Many say things they don't necessarily mean, or even understand.
So I thought today we be a good time to remind everyone what we're even doing here in the first place.
This is not a children's book.
The market is not a bunch of rainbows and butterflies, and neither is life.
As market participants we have made a decision to enter into one of the most difficult and violent endeavors in all of human history.
Don't forget that.
You can't forget that.
Otherwise it's over. You don't stand a chance.
Personally, I'm going to continue to mind my own business and take care of my family.
I'll be right here every step of the way walking you through my thought process because that serves 2 very important purposes for me:
- Selfishly I win by writing every day. And I would encourage you to do the same, whether you share it publicly like I do or not. But putting your thoughts down on paper can be incredibly therapeutic, and also creates a great history for yourself to go back and read to learn more about how you think and analyze markets during different environments.
- Sharing is caring. I've met thousands of ASC readers over the years, in over 30 cities, including over a dozen countries throughout Europe and Asia. It's great that I get to pass down the lessons I've learned over the years, but it's also awesome to meet and become friends with so many amazing investors who are completely different than I am, and not a Cuban kid from Miami.
My journey over the past 20 years has been incredible. It's what makes this moment special. It's what makes every moment special. Sure, it's had it's ups and downs, but that's what makes it what it is. It's what makes you who you are.
Market participation is about longevity. It's about surviving. The longer folks are able to do it, the more I respect them for it.
Participating in markets is a privilege. It's not a right.
This is hard.
It's difficult enough worrying about yourself and your family, that you then have to worry about who is betting against you?
It's easier not to.
It's not your problem.
My your own business.
That's how I see it.
If you want an inside look at how we think about markets, I encourage you to join me and the team on Monday at 5PM ET as we prepare for our Mid-month Conference Call next week.
It will give you a better idea of what goes on behind the scenes as we put together one of our most highly anticipated events of the year.
Should be fun.
See you Monday!
JC