Things That Never Change
Past is prologue because it’s all we have.
A lot of investors lose sleep over what might come next. I know this because they always have. And because they always have, they always will.
I've made a habit of taking shots at market prophets because there’s nothing more deplorable than scaring investors into action. Communists, deficits, and corruption are today’s reasons to panic. And if you’re not worried you should be.
Successful investors must accept that terrible markets arrive without warning. We know the Great Depression, the 1970s, and 2000 to 2010 happened. And the next one is coming. We just don't know when.
But history arms us with the knowledge that some things never change:
- Prices will rise.
- Existential crises are always around the corner.
- Unsolvable crises get solved.
- Entrepreneurs create better and better products.
- Markets recover.
Prophets always focus on the first two bullets and ignore the last three. But the last three are the most important. Crises end. They always do. And who cares if they don’t? Because we’ll all be living in some post-apocalyptic world (or worse) anyway.
I have no idea what comes next because tomorrow never knows. But I know that worrying about it is pointless. I used to hate it when clients would ask me what worried me because I pretended my answer mattered. How can I sound as smart as possible without worrying this person AND keep them invested? I’ve learned since then.
What am I worried about today?
I’m worried that a prophet gets to my clients before me. It’s why I write so much.
Footnotes:
The opening line is thanks to the timeless Billy Shakespeare, from the Tempest (Act 2, Scene I) “What’s past is prologue.” Reading The Tempest in first year university paid dividends (even if dividends are irrelevant).