Good Morning,


I am confident you have seen the from Friday, the weekend reviews and the Monday “shellacking” in tech.  I chuckled yesterday when I saw this headline late in the day:


“Now Bitcoin is Crashing with Tech Stocks”


Crashing?  Really?  Have we come to the point where any red ink is either a) a crash or b) the start of a crash?


If so, then as a long-term investor, one should be aware history would suggest it is time to rejoice.  At least in my 35 years of being around this crazy arena, it has always been a good thing that the crowd was terrified of stocks.


Recent emails have provided you vast updates of the real emotion and sentiment behind the markets.  A vast majority of the crowd is hugely underexposed to equities and further – remains significantly, outright, afraid.


In case you needed another dose of comedy – check it out below…


In recent years, we have literally been inundated by headlines designed to keep your attention on what has proven to be useless noise – and off the important elements of your financial goals.  Some of those headlines were from some pretty prominent names….a solid lesson indeed:

Friends, there is always something to be concerned about.


As stated often, we must help clients understand there is a vast difference between what your emotions will tell you and what the market tends to be pricing in about the future.


It’s an untidy beast at times…completely mystifying at others.


Often, little from the headlines mixes well with price action.


Even now as I type, I am listening to media talking heads on CNBC speak of the risks and tech weaknesses even as the scrolling headline on the bottom of the screen flashes “Dow hits all-time high….”  Simply mesmerizing – and sad to think that the average investor is left to figure this out as a sea of emotional waves tosses them to and fro.


Some Thoughts…


Since 1982, the Dow is up more than 20 times over.  We are the largest economy on earth – steadily closing in on a breach of  $20 Trillion in annual GDP.


Over the next decade, using the very same math we have seen for decades before us, we should see our GDP close in on a double.


Imagine that – $35 to $40 Trillion in GDP in the next 10 years.


Do you think anyone will remember the last two days in tech then?


Will you?


Here is an even nuttier thought for you:


IF all of the very same terrible rolling crises strike us at the very same pace over the next 35 years…and all of the same math repeats itself as well, with plenty of bear and bull markets – along with a few ugly recessions, the Dow would be set to rise 20 times over again.


The magic and simplicity of compounding returns is the most overlooked and undervalued benefit in all of investing.


Time is your hurdle.


Patience is your required mentor – but the most difficult friend to embrace.


Besides, as stated often in recent years – we can be confident that the “picture” of our current GDP being reported is very, very likely under-reported.  In time, we are likely to find that this under-reporting has gone on for some time.  Why?


Think about it – the systems, reporting processes and procedures for “ordaining” the quarterly GDP we all hang our assumptions on, were created in the 50’s…that’s the 1950’s.  For those counting, call it 500 dog years ago and 50,000 economy years ago.


But hey – that’s an entirely different morning email rant.


The Worst Part of This?


As a long-term investor, it is imperative we recognize that the better pathways often tend to be boring.


They are far from exciting – and in today’s push-button world – it is admittedly extremely difficult at times to just “sit around and wait” for the huge, very surprising and highly beneficial demographic waves to roll to us.


They will arrive – whether we like it, or agree with it – or not.


That’s the good news.


Here is a reference from Warren’s latest annual letter.  His words of wisdom are always helpful as a back-up to the demographic “people make markets” logic if you will…please let it sink in – and relax a bit:


“American business – and consequently a basket of stocks – is virtually certain to be worth far more in the years ahead. Innovation, productivity gains, entrepreneurial spirit and an abundance of capital will see to that.


Ever-present naysayers may prosper by marketing their gloomy forecasts.


But heaven help them if they act on the nonsense they peddle.


Many companies, of course, will fall behind, and some will fail. Winnowing of that sort is a product of market dynamism. Moreover, the years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks.


No one can tell you when these traumas will occur – not me, not Charlie, not economists, not the media.


Meg McConnell of the New York Fed aptly described the reality of panics: “We spend a lot of time looking for systemic risk; in truth, however, it tends to find us.”


During such scary periods, you should never forget two things:


First, widespread fear is your friend as an investor, because it serves up bargain purchases.


Second, personal fear is your enemy. It will also be unwarranted.


Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well.”


Now, re-read that every morning and night for the next 30 days.


The Bottom Line


The tech “volatility” is perfect.  Just what the doctor ordered really.  It will happen again – and that is good as well.


I suspect AAII sentiment falls back again later this evening.


Just remember – summer is boring.  It always is – and that is a positive.  It tends to uncover short-term reactions we can then take advantage of as investors.


Our job sometimes is to just stand between clients and their emotions.  It helps in making fewer mistakes along the way.


As a send-off today, the summer haze will tend to “feel heavier” by the day so don’t fret or over-anticipate.  It’s the calendar – not the market.


The theme for the next 10-11 weeks will remain a focus on patience and discipline:


Ignore Politics – Focus on People.


Pray for a summer swoon.




Well, we can have the courage to take a look at every other summer swoon in history.


They were all at lower prices than where we are now.


Enjoy the beach plans ahead and time with loved ones and friends – be well and please travel safe!


Until we see you again, may your journey be grand and your legacy significant.