We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.
Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!
But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.
Here are the articles for the week ending 29 March 2020:
1. Wounds Heal, Scars Last – Morgan Housel
When people feel the correlation between their decisions and their outcomes is high, there’s less desire for a strong social safety net. But when something impacts everyone at once, and can ruin the careful as much as the reckless, there’s a history of people coming together to support a public backstop. We saw that Wednesday, when a $2 trillion rescue package passed the Senate 96-0. I suspect we’ll be seeing more of it for years to come.
2. Why the Stock Market Rallies on Bad News [link goes to video] – The Compound
Michael [Batnick] and Barry [Ritholtz] discuss the latest record-breaking unemployment numbers and why the market is rallying on this bad news? What is going on?
3. What we learn from the past – Samuel Rhee
The markets were down almost 50% and everybody had lost their shirt. We worried we wouldn’t have any money to manage when all was said and done. And more importantly we thought we would all soon be out of a job. We were desperate for some guidance and sage advice from Barton. I asked him, “Barton – is this the worst thing you’ve ever seen?” He paused and thought for a moment, then he slowly opened his mouth. His answer was completely unexpected to everybody in the room. He said, “to be honest, I think 1974 was much worse.” We all turned to each other and looked around the room and asked. Wait what? 1974?
4. Stock Market Commentary: Confront the brutal facts, yet never lose faith – Chuin Ting Weber
So we keep the faith amidst the brutal facts in the short term, because the faith in our long-term destiny is ultimately our faith in humanity’s ability to overcome, as we have done in the past. Once again, our economies will grow on the back of human innovation, industry and our collective and relentless pursuit of a better life. Together, or probably preceding this, the stock market will go up again. We do not know exactly how long the pain would last or when the upturn would come, but come it definitely will!
5. How Did We Ever Get to The Roaring Twenties? – Ben Carlson
It’s also hard to believe the U.S. was ever able to pick itself up off the turf to make the Roaring 20s happen in the first place. Let’s go through a list of what occurred in the lead up to one of the biggest boom times in our country’s history:
World War I (1914-1918)… Influenza Pandemic (1918-1919)… Post-War Recession (1918-1919)… The Depression (1920-1921)… This 8 or so years looks like hell on earth:
And yet…look at what came during the aftermath.
6. What If You Buy Stocks Too Early During a Market Crash? – Ben Carlson
I know of a professional trader who foresaw the Great Recession, went to cash in the summer of 2008 before things got crazy and came up with a wonderful plan to put his money back to work at the lows.
He planned on putting his cash into a simple S&P 500 index fund in 25% chunks when the S&P hit 650, 600, 550, and finally 500. It was a generational buying opportunity and I was jealous he had such a wonderful plan of attack.
The only problem with this plan is the S&P never got to those levels, even though plenty of people were predicting it at the time.
The S&P hit an intraday low of 666, he put his cash to work and ended up never getting back in. He assumed the initial bounce was of the dead cat variety and a double-dip recession would give him another opportunity to buy but stocks never looked back.
I’m not sure many investors sitting in cash or bonds at the moment are worried about being too late. Those with dry powder left are far more concerned with being too early, as most assume things will only get worse.
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