Dear Reader,
This is Dylan Jovine with Behind the Markets.
Happy Tuesday. Today is Tuesday, March 31st.
I had dinner last night with some friends — a 50th birthday for a buddy of mine — and sure enough the topic of the Iran war came up. Some people at the table were saying they needed to sell the market, it's a disaster, and others were saying no, don't sell.
And it got me thinking…
I take for granted that I've been doing this for almost 35 years. But I remember being young on Wall Street and feeling the same uncertainty these people were feeling. I remember the first World Trade Center bombing in 1993, and I was sitting there asking myself, should I sell stocks?
I remember the Oklahoma City bombing. The government shutdown. Long-term capital management. The Asian financial crisis. The Russia default. Y2K. 9/11. The Iraq War. The housing crisis. The great recession. The European debt crisis.
There have always been smart-sounding reasons to sell stocks. Always.
If you go back to 1950 and run through the list — the Red Scare, Sputnik, the Korean War, rising interest rates, the Bay of Pigs, the Cuban Missile Crisis, Kennedy assassinated, Vietnam, RFK and MLK killed, the OPEC embargo, Nixon resigning, double-digit inflation, the 1987 crash when the market dropped 22% in a single day — through all of it, through every single one of those moments…
When smart people had smart-sounding reasons to get out….
The market has gone up 100 times. A hundred times.
That is an amazing thing when you sit with it.
What I've learned over the years — and this is one of the most important things I can share with you — is to keep things in perspective.
There is always a war. There is always a recession. There is always a revolutionary new technology. There is always a leader people love and a leader people hate.
There are always terrorist attacks, proxy wars, debt crises, investigations, Supreme Court controversies, battles between branches of government. On and on and on.
This is just the human experience. Humans are gonna human. And you cannot let the strum and drum of the human experience shake you out of the market, especially if you own good things.
Here's the reason I believe the market keeps going up through all of it. The United States has a system for allocating capital that is better than everybody else's, period. Low regulations for capital formation and, crucially, low punishment for failure. You can set up a business in America in an afternoon. Register an LLC, go to a bank, and you're off. In most countries that is not the case. And when the idea doesn't work — when you spend three years on something and it turns out you were wrong — you walk away. You don't go to debtor's prison. I have started multiple businesses. I have failed in business. And both times it was my ability to move at my own speed that got me to the next thing.
As long as our system allows capital to form quickly, allows new businesses to start easily, and allows failure without catastrophic punishment — you just go to the next thing — this country will keep producing wealth. That is the bottom line. That is why the market goes up 100 times despite everything that happens along the way.
When I look at politics, I don't really think in terms of which side is right. I think in terms of policies. And what I'm always watching is whether we're preserving that freedom — the freedom to start something, and the freedom to walk away when it doesn't work.
As long as that stays intact, I like our odds.
Don't let the human experience shake you out of the market.
Anyway, I just wanted to share that with you today. Have a wonderful day. I'll see you tomorrow.
Tidak ada komentar:
Posting Komentar