I’m an attorney. This morning I received a “morning briefing” from a broker. He’s been sending me similar briefings recently every time the stock market wildly gyrates. Until this morning, the briefings have been comforting, basically advising people that “the fundamentals” remain good; to take the long view; ride out the storm.
This morning’s briefing took a darker tone, noting that overnight the Chinese responded to Trump’s slapping tariffs on China by — totally predictably — slapping tariffs right back on the US. The briefing noted how such things can quickly get out of hand, damaging the world economy “perhaps permanently”, and included the phrase “Let’s hope cooler heads prevail.”
I happen to regularly correspond about political/economic matters with a well-to-do client of mine – he’s usually at one of his homes either in France, or NYC, or Miami. BIG right-wing Republican. Jewish (as am I). In his 70s now. Tickled pink with Trump, who he knows is an idiot asshole (early on, he told me numerous times that he’d vote for Donald Trump OR Donald Duck over “Killary”). HATED “Barry”. LOVES him his Gorsuch, and pipelines, and a neutered EPA, and “draining the swamp” (of liberals, not corruption, just in case you’re wondering). You know the type.
So I forwarded this morning’s briefing to him. He responded by telling me he switched ten years ago to investing for his kids and grandkids – takes a 40-50 year investment view – and advised me to do the same.
Here’s my reply to him:
I do keep my eye on the longer-term.
Here’s some “big picture” info for you:
- We’re at the end of a nine-year bull market (I know Republicans never ever ever ever ever noticed, or even now admit that, but it’s true – look at the numbers). That’s way longer than normal, historically.
- We have a President (enabled by a Congress of the same party) who has single-handedly started a trade war – and who says “trade wars are easy to win”.
- Trade wars are NOT easy to win.
- Quite possibly next come one or two “hot” / “real” / “shooting” wars. Think Korea, Iran, Syria, Bolton.
- The President, and the enabling Congress, are Republicans. Actually, radical right-wing Republicans. John Bircher types.
- Radical right-wing Republicans historically are GREAT at driving the US economy into the ditch. It’s basically what they do. Check back over the last 100 or so years of history.
- The Republicans just passed a trillion dollar plus deficit busting tax give-away to large corporation and rich Republicans – unnecessarily, of course, since corporations and rich Republicans were all already wallowing in cash. At the end of a nine-year bull market. Completely unnecessarily. Just because.
- If you think you’re taking the “big picture” view – you’re seriously deluding yourself. You’re actually sticking your head in the sand.
Coda: A little true story for your 40-50 year investment horizon. My family was rich. Lived in Germany, from the 1300s into the twentieth century. Nazis came to power – by bashing immigrants, bashing religious minorities, bashing liberals and Commies, claiming they’d get the lagging economy humming again (which – again, check your history – they actually did) (until they left the country literally in ruins, but “if only” Hitler hadn’t started that nasty war….). Get the picture? In a matter of six years after a free election, in a Western, European democracy, my “rich” family escaped with the clothes on their back. Their chauffeur literally drove them to the border in their Mercedes; they walked across with just the clothes on their backs, and chauffeur drove back home in HIS Mercedes. About 70 years later, I bought a Mercedes – as my way of saying “Fuck you” to the Nazis.
Moral of the story: You might want to expand your long-term investment horizon to 60 - 70 years. Shit happens.
Additional coda to my story:
I also wrote back to my broker this morning. Quoting the briefing he sent me, I wrote to him:
“Let’s hope cooler heads prevail”???? Have these guys not noticed who is in charge of the US Government?”
Broker replied: “To be honest … ‘who’ [is in charge] is the question…this dummy is not even in charge of his own mouth, much less other body parts.”
To which I replied: “Republicans, is the answer. Radical right-wing ones, too. Never good for the economy.”