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When I started this blog in April of last year, I did so with a singular purpose: To offer a counterpoint to the Tsunami of dread the media was ginning up for investors on a daily basis. I had grown very tired of turning on CNBC and being inundated with the latest crop of stories about how the End of the World was nigh upon us and everyone with any money at all should run screaming for the exits. So I set out to offer a different, which is to say calmer, perspective on investing in these turbulent times.
It is an ambitious kind of thing when you start a blog that has no readers and you are attempting to counter the Jim Cramer’s of the world, who reach millions of viewers every night. But righteous was my indignation, strong was my purpose, and cheap is it to start a blog. And so “The Tranquil Investor” was born.
As you will see in my prior entries, I am not a fan of market timing. But I must admit I did time one thing very well as it relates to this blog: I began offering my counterpoints to the doom-and-gloomers almost precisely when the market began its jaw-dropping turnaround after its low in mid March. In fact, since I started TI (my acronym for “Tranquil Investor” – all the cool blogs do it, you know), the S&P 500 has gained north of 40%.
Yes, there’s nothing like a 40% market gain to make you look like an investing genius. If I had any sense at all I’d turn this into a subscription-only site and charge people $300 a year for my “secrets to how I correctly called a 40% market gain in only nine months!!!”
But that, of course, would be wrong (and by “wrong” I mean “the way Wall Street does it.” Isn’t it funny how easily interchangeable that is?) The truth is I was telling my clients, friends and family not to lose faith and flee the market in October 2008, too, and I sure didn’t look like a genius for the next five months.
Anyway, by the time last November rolled around, I must admit I found myself a little stuck for material for TI. The market was up nearly every day, the media had lost its apocalyptic story line and was reduced to focusing on things like earnings (zzzzz), and the mood of investors was just so, well, tranquil that I wondered if maybe this blog had served its purpose of guiding folks through an epic market crash and it was time to put it to bed. No more windmills to tilt at, as it were…
In truth, of course, I knew those halcyon days wouldn’t last forever. And they didn’t: January rolled in and the market tide began rolling back out. Triple-digit market swings once again become more the norm than the exception, and in the past few weeks the Dow has dropped about 800 points from its 12-month high and then gained back nearly all of it.
With the return of volatility to the market, my material has returned as well. The very same pundits who told you to run for the hills a year ago are now staring at you from behind their anchor desks, earnestly wondering which sector of the market you should be in. (It makes me want to tap on the glass on my TV screen and say, “Hello? If I’d followed your advice I’d be sitting in cash earning 1% right now. Remember? What about the 50% gain I missed out on? Can we talk about that???”)
Still, in my hiatus from this forum since last fall, it occurs to me that there is so much more to talk about than just mustering up your courage to stay the course in tough market conditions. I don’t want to be a one-track Pollyanna, after all. And in the wake of the near collapse of the global financial system in 2008, the world is undeniably different now; as a result, there are a lot of interesting and important things to talk about in the financial world these days. Not to mention a lot of things that are just plain humorous. (Exhibit A: Merrill Lynch’s analysts recently upgraded Bank of America’s stock rating to a “Buy.” Meanwhile, BoA has made it clear it does not believe that Merrill was such a good buy. Oh the irony!)
So we’ll go forward from here secure in our belief that staying the course in a well-diversified portfolio is always the smartest move even in tumultuous times. And we’ll focus on some other interesting things along the way.
And, above all, we will continue to rattle Wall Street’s cage until they heave to and stop their insatiable thirst for turning the investing public’s dollars into tax-loss carryforwards.
(That last part may take awhile, fyi…)
A few weeks ago I received a summons for jury duty.
“No sweat,” I said to myself, noting that the box marked “standby” was checked. I’ve gotten a half dozen or so jury summons (summonses? summonsii?) in the past ten years, and I’ve been a standby for all of them. In each case I’ve been dismissed by phone without even having to go downtown. Piece of cake.
So it was to my great chagrin and extreme dismay that, two weeks later, I found myself sitting in a courtroom in a skinny little pool of thirty potential jurors waiting to be interviewed by the Fulton County assistant prosecutor and public defender for a capital-freaking-murder trial that was expected to last at least a week. (This is why my old journalism school professor told me that when we “assume” it makes an “ass” out of “u” and “me.” In this case, mostly “me”…)
On a break, before the final jury was picked, I texted a number of friends and family to tell them of my predicament.
“Just lie!” one of my friends instructed me. “Just tell the judge you think he’s guilty now – don’t even need to have a trial!”
“Yeah, right,” I thought to myself. “Easy for you to say behind your computer. You come stand down here and look a superior court judge and D.A. in the eye and tell them a big, fat, obvious lie.” No, thank you.
Nonetheless, I most definitely did not want to be on the jury, particularly because the defendant’s extended family took up the entire back row of the courtroom and the court clerk kept calling: “Mr. Calhoun? MR. JACK CAL-HOUN???” Like it’s hard to find out where someone lives these days.
So I resolved when they interviewed me to be truthful and yet to try to project an air of being a really bad choice for the jury – however one does that. After mulling it over, I decided to go for “intense.” Make both sides wonder if maybe they didn’t know me as well as they thought, like maybe I might be the kind of wildcard that would do the opposite of what they were expecting in the jury chamber. I lowered my forehead as much as I could and tried to look hard at everyone without actually scowling or appearing threatening. It was a delicate balance.
Only, the very first question knocked me out of my game. Or, more specifically, the reaction to my answer.
“Mr. Calhoun, what do you do for a living?” asked Mr. Assistant D.A.
“I am an investment advisor,” I said.
And then the most shocking thing happened. The courtroom spontaneously laughed. Laughed!
And it wasn’t a laugh like you might hear if someone is saying “Ha ha, that’s neat!” It was the kind of laugh you hear when someone tells you a story about something humiliating that happened to them and you are just so glad you aren’t them. Like “Ha ha! That sucks for you!”
Even the defendant chuckled – and he was facing the electric chair!
Now I felt like I was on trial. “No, it’s not like that!” I wanted to tell them. “I’m one of the good guys. We actually help people!”
But it wasn’t exactly like I had the floor, being a murder trial and all, and it seemed a bad time to try to explain the finer nuances between being a product-pushing stock broker and a conflict-free, fee-only investment advisor.
The D.A. looked at me with a modicum of compassion. “Been a tough six months, huh?” he said. Rather than argue with him at this point I just accepted my fate and played the hand I’d been dealt.
“It’s been like working for the Suicide Prevention Hotline,” I said. At least this time I got a laugh on purpose.
Then the Public Defender had his turn querying me. “Mr. Calhoun, you answered ‘yes’ to a lot of our questions, didn’t you?” he said.
This was true. I tried to think of any arcane example I could come up with to every single question they put to the jury pool in the first round of questioning, and I’m pretty sure I came in first place. I figured the more I answered “Yes” to questions like, “Was your grandmother ever held up in front of her own home by a shotgun-wielding thug,” (which is, by the way, true), the higher your likelihood of alarming one side or the other.
“Do you think you can put aside these experiences and judge the defendant fairly, impartially and without prejudice?” he asked.
Dang. The moment of truth. I was hoping he would take one look at all my “yes” answers and tell me to have a nice day, but it wasn’t going to happen. I looked at the judge, who sort of had one eyebrow raised as if to say, “Don’t be the four thousandth idiot who’s come through my courtroom and said ‘no.’ You wouldn’t like me when I’m angry.”
“Yes,” I said. “Yes I can.”
I thought my fate was sealed, but when they impaneled the final jury I was delighted that I did not hear my name after all. Only I don’t think it was because of any great strategy on my part.
I think they just felt sorry for me.
