It’s time to revisit some of the posts I wrote during the October 2008 panic. This is one of my favorites . Today’s panic seems to revolve around missing a new bull market. As with all panics, it’s not whether you SHOULD panic, but when. My TWO words of wisdom on panic are…PANIC FIRST! I have copied the whole of the October 2008 post below:
There is panic people. You can choose to Panic or you can do as I do everyday and repeat after me…’I am TOO small to FAIL!’
Here is Wikipedia on Panic (you can’t trust Wikipedia though according to CalacANUS). Jason would prefer you to be on his closest 7,000 friends email list to get his version of panic.
Here are all the finance Books you can quickly read on the subject.
In fact, ‘Panic’ in my headline would be way better for Google juice, but that’s not this blog is about.
There is not much really useful to say in the middle of the PANIC that is upon us. I am in it with everybody else and trying to shut out as much noise as possible. I was at Kol Nidre services with the family and was expecting the sermon to be about PANIC. I was PANICKED about having to sit through it. In the end I missed the sermon as we left before it came, my first blessing for being in the ‘good’ book (Note to Rabbi’s – If you want an awake audience or any audience for your sermon, squeeze it in early). But I digress…
Panic is infectious. It’s a virus that will run it’s course, but each one is different. Rest assured THIS panic is the MOST talked about one before it ever happened, yet still so few have avoided the damage . How can it be that such a well documented debacle could cause such massive damage (the IBD mutual fund index is down 40 freaking percent this year).
This is a once in an investing life time panic ALREADY in it’s breadth and off the chart readings on a daily basis . To call an end to this would just be luck and therefore off limits here.
Here is why panic spreads. Otherwise smart people, who on the surface think they are calm, freak everyone out with their own passive aggressive panic. If you don’t believe me, Sequoia and Uber angel investing guru Ron Conway are just now writing letters to all their CEO’s and giving them advice on how to survive . I mean today?
No offense, but get over yourselves.
If you have a good business, these letters are ridiculous in the timing. Maybe force them to read this letter upon funding and make them memorize it, but at this point, it reeks of panic and fear.
I have been telling any of the CEO’s that will listen to me, to THINK about how we turn this panic into an opportunity. We all have weak investments and weak CEO’s, but a blast email on October 7th is absurd. Anyways, I am poor and they are rich, so that’s that. So while the rest of the world panics, you can panic too, or you can take a few steps back and remember how fortunate you are to be reading this blog, because if you are, you are ‘Too Small to Fail.’ So what do I mean by that?
I can’t fire myself. I am nimble and lean and have a plan. I see this panic and I want to think about the afterbirth of it. Panic’s end. If you are smart and a little lucky, you will survive in good stead and historically, great things happen. If you don’t believe me, take a look at this chart from my friends at Blackstar (I have an investment in their fund). We are in the worst 12 month rolling period of returns since 1937. If you look closely…what follows is investing NIRVANA (click below to enlarge)
In that spirit, put aside the panic for a moment and consider these possibilities:
DOW 20,000 during the Obama presidency (assuming he wins, otherwise Dow 1,000 and stop reading :) )
Bull market in financial companies no one has ever heard and a new industry no one knows about right now
Post war economic boom
Democracy and capitalism thrives in Iraq
America regains the respect of the world again via financial crisis leadership management success
Bull market in the dollar
Berkshire Hathaway will triple from here
Higher capital gains tax, lower payroll tax, and a lower fiscal deficit
Better internet porn (this one is pure bait to get me to actually post all the other ones here…and it worked)
Buffett will be the treasury secretary in 2009 or have a major role
U.S. taxpayers get all their bailout money back w/ interest
Regulations of credit default swaps which will be traded on the CME
The hedge fund industry gets bigger with fewer players
Does that mean you should bet the farm now?
Does that mean you should not do what Cramer says and sell everything in common stocks you need to pay for a renewed subscription to TheStreet.com?
I am not here to hold your hand and say everything will be hunkeedoree. This blog is not called ‘Your Mommies Bosom’ (although Note To Self: great Google Juice). You need to gut up, and know what your risk tolerance is. If you don’t, the market will bust you up.
I will tell you that I have been buying. I will be buying tomorrow again. I am too early so far, but I have a plan…and I am ‘Too Small to Fail!’