Thursday, April 23, 2020

From where I sit at Ghost Ranch

Montana has been one of the better places on earth for the last couple of months.  Eating fresh fish out of the Yellowstone and all the deer and elk in the freezer has been a treat.   The county I reside in doesn't have a single case of the Covid 19 and neither do the counties on either side of my county.  Lucky?  Probably.  

I probably aren't deemed as brilliant or educated as all of the "experts" in epidemiology and virus treatments as so many Americans now seem to be.  Heaven's sake, they watch CNN or scour Facebook getting their daily dose of intelligence.  Many are even acting as lawyers with expertise in constitutional law!   (I am ashamed my constitutional law book when I was in law school was authored by  Laurence Tribe, truly one of the liberal elite!).  As for me, armed with an economics degree and 38 years watching price, volume, pain, fear and greed collide on my screens it's been eye-opening to hear so many outlandish, socialistic ideas floated about.

I do have some thoughts.  Here are five that I'll share from my perch this fine morning at the Ghost Ranch in Montana.    

One, capitalism seems to be in awful short supply.  There will be a price to pay for the trillions spent.  Once again, government saving bankrupt companies isn't capitalism.

Two, the lies, politics and lack of common sense from  media and politicians was and is hard to stomach.   I have tuned out all TV including CNBC, home of some entertaining cheerleaders.  My screens tell me all I need to know.  The screens also tell me how inept management and greed and incompetence in corporate board rooms as well as Wall Street continues unabated. 

Three,  years ago I knew there was going to be a time to get more equity exposure that should permit me to own stocks for the rest of my life without worry.  I knew there was an exogenous factor, I called it an X factor, that would knock markets down and allow entry points where I probably don't need to ever worry again about prices.  Other factors yes, factors like inflation, taxes, devaluation and increasing my income from my investment portfolio.  If you are reading this you probably remember some commentary on my thoughts. 

A few years ago, I took a stance of caution in my investment practice.   I had upset clients because I took a cautious stance and they tired of waiting for the calamity that was to come.   I wished them well and hope they are in a good place with their assets.

I was hunting hard with friends so it took 10 days after Trump was elected before I was all in.  Since then I  was able to double my portfolio and took on a lot of risk.   Today, my portfolio hasn't changed in the number of holdings I own.  My thinking was simply to ramp equity exposure as the market came down.  Greed and fear don't change, you have to buy things on sale.  The investment business is the only one I know where when things are on sale, no one wants to go to the store!   I only changed the percentages between fixed income holdings and equity holdings and continue to own gold and gold mining shares which should continue to advance because the printing hasn't stopped at the FED.   Disney will some day continue to entertain, Amazon will continue to deliver, UPS will do the same, Exxon will fill up my gas tank, you get the drift, stocks will some day go on to new highs and the down markets in hindsight will only have been temporary.   

I have taken many calls from friends and former clients asking me what to do.   My answer has been consistent and simple.   Don't do anything.  Don't sell at the bottom of a temporary decline.   This too will pass.  I am thinking it will be 2023 before we get back to whatever normal is.   Studies have shown that three years is about all an institution can take of negative pain in an asset class before they liquidate their holdings.  In three years Trump should still be in office and stocks will help solve problems down the road.   For those who called and emailed and said they couldn't take the pain and sold their equity holdings there is nothing I can say other than I feel bad for you.

Four, there is more pain to come.  The criminal global banking cabal is in charge of the purchasing power of your dollars.  You better be thinking about the devaluation of your money.  Besides, if you think Covid 19 is bad wait until they roll out Covid 20!

Five,  the fear shown by society has been eye-opening.  Too few fear the sickness of the surveillance state and fear of government overreach. The world is still on a dopamine, hypomanic binge and fearing FEMA, NIH, the FED, DOJ, SEC, FINRA, CME, FBI should be enough to give anyone with common sense reason to pause.

The Yellowstone River this morning is quiet.  Almost dull.  In a scant 30 days it will be swollen and raging from the melting snowfields in the headwaters high in Yellowstone  Park in the most remote, pristine spot in the United States.  Like markets and life, the Yellowstone River every day is different. 

We have survived thousands of years as humans.  There is a reason we have survived.  We are good at risk management.  If you need a doctor the six best doctors are sunshine, water, rest, air, exercise and good nutrition.  Make your immune system better.  Every day.  Work at it.  

I used to thrive on pressure and don't personally subscribe to fear or panic.  I always found adversity to be my best sparring partner.  Most people are scared of this virus killing them.  My Creator knows when I will punch out.  I don't worry about it.  I don't fear death.  

What I really fear is not living!

Life's challenges and storms will come again.  Be ready.  Know your purpose and how you will capture the opportunities offered living in the greatest nation in human history.  

And every day be thankful for the ability you have to use the greatest tool known to mankind, the freedom to choose your attitude!

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