It’s kind of like the polio shot they gave us in second grade. We weren’t given a choice. They just lined us up, and shot us up with a vaccine that was “for our own good.”
My financial advisor has put a similar spin on the current pain in the seat of our economy. Her name is Lynn Phillips and she typically, (magically) turns my dimes into quarters., but we are struggling together right now.
I’ve worried her to death this week with my “Chicken Little” panic attacks and she is trying to calm me down.
She forwarded me an article from the Wall Street Journal which suggested the current conditions will toughen us up and prepare us for new rules in the global economy.
It read in part: “This May, at the Berkshire Hathaway annual meeting, Warren Buffett boiled down what it means to be an intelligent investor into two startling sentences: “‘If a stock [I own] goes down 50%, I’d look forward to it. In fact, I would offer you a significant sum of money if you could give me the opportunity for all of my stocks to go down 50% over the next month.’
Knowing he owns good businesses, Mr. Buffett wants prices to go down, not up, so he can buy even more shares more cheaply before the bounce back.
The article continues, “If you are still in your saving and investing years, a bear market is a gift from the financial gods — and the longer it lasts, the more opportunity you have to buy low. Instead of running from the bear, you should embrace him.”
Well, darn it. I’m past my saving and investing years and deep into my spending years. I could die of this blessing from heaven.
Mr. Buffett has also pointed out, investing is much like dieting: It is simple, but not easy. Everyone knows what it takes to lose weight. (Eat less, exercise more.) Nothing could be simpler, but few things are harder in a world full of chocolate cake and Cheetos.
“Likewise, investing is simple: Diversify, buy and hold, keep costs low. But simple isn’t easy in a market seething with “free” online trades, funds that promise to transform losses into gains, and TV pundits who shriek out trading advice as if their underpants were on fire. (I love that.) The real secret to being, or becoming, an intelligent investor is bolstering your self-control,” continues the article.
In a nutshell, the message is “That which does not kill investors makes them stronger” hence my analogy of the polio vaccine which gave me a scar still visible today. Unfortunately this dose of medicine tastes more like cyanide!
They put arsenic in his meat
And stared aghast to watch him eat;
They poured strychnine in his cup
And shook to see him drink it up….
I tell the tale that I heard told.
Mithridates, he died old.