So, the markets are down. As I write this, the point drops are the worst ever!!! Over 1000 pts on Monday (Feb. 5, 2018). End of times, right? Where does this fit historically? Does not matter – we must panic – NOW.
What should we do about this? Naturally, assign blame for this fall. No time to discuss whether this is just natural volatility or even a needed correction. We know this is important because the media can’t stop talking about it (passionately and from the perspective of their political leanings).
We have seen politicians and news media seek to attribute upward trends (or happy stock price increases) to specific actors and politicians (I write this politically neutral as all parties seem to do this – depending on your media preferences, this may be accepted as absolute truth (trust me) or complete fake news).
Today, we have activated the blame game for the downward activity (I first wrote trend, but there is no evidence of a trend) of the markets (which, to reinforce, could be absolutely natural and no need for causal claims). Republicans like to attribute the upward trend in market prices to current President Trump (as he himself claims/Tweets), but downward market outcomes seem to be due to someone else (this blog is inspired by this article blaming former President Obama for the “fall” (and I would not be shocked if FOX also did not blame Hillary – who, last I checked, is not President). This is not to attack Republicans or Fox, as if the roles were reversed, we would still have the same attribution game going on.
Other than just venting, this post is a reminder to just ignore this noise. We can trace the concept of financial pornography to the 1990s. It is about emotional highs and lows. But you don’t have to play.
Imagine if we evaluated professional baseball players like we do the stock market. What did they do today (while we do follow day to day, we know that it is about the season)? Strike out 5 times (an unfortunate current trend in baseball)? Loser. 3 home runs? Hall of fame. Yet we accept the strike outs if they bring the long ball. We can only justify strike out rates and home runs when viewed in the aggregate. We evaluate the entire career when we assess hall of fame credentials.
We invest today (in markets and our businesses) for the long term. While current events must be monitored for signs that we may need to adjust our plans, we should not act like pinballs that change directions constantly due to any bumper. If you have strategically prepared and planned your business and process (built upon impact mission, vision, purpose, and values), trust your process. Adjust when necessary. But the conversations out there should be treated like that car next to you at a stop light that is shaking apart with bad thumping “music” – it is there, it is annoying, it makes us feel bad, but we just keep moving forward as planned (because that light turns green and we hopefully have a better car).