When Crisis Meets Opportunity

March 2, 2022
min. read

“The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter, and headlines will continue to be scary. So, I’ve been buying American stocks.” - Warren Buffet, October 16, 2008.

Sound familiar? Putin’s invasion of Ukraine has turned the geopolitical world upside down while uniting the rest of the world.  This situation is complex, and it’s impossible to forecast how or when it will end.

However, like every crisis before it, this too will end and life will go on. The world will improve, heal, and be better in the long run.

When it comes to your portfolio, this is an opportunity to buy pieces of America’s future at marked down prices. And make no mistake, the best businesses in the world are on sale right now.

This is no time to be fearful.

It’s a time to put cash to work for the long run and welcome the incredible compounding power of dividend reinvestment which is automatically buying cheaper shares of these quality businesses every day.

We will look back on this time as one of those rare opportunities to do nothing (and avoid the big mistake) or to buy the world’s best businesses at substantial discounts.

We exist to help you better navigate not only the decisions around your portfolio, but your overall financial life.

Financial journalism, and media in general, is often filled with overly negative and biased information meant to influence and instill fear. We help you consume information that is helpful, insightful, and inspiring. Helping you understand that while times are tough now, they are temporary and better times are ahead.

A trusted, dependable guide through the toughest of times, we instill confidence and conviction in your plan, in what you own, and in the decisions you make in your financial life.

If you have about 10 minutes we encourage you to check out Mark Manson’s timeless piece Why You Should Quit the News. Like Mark, we believe rather than skimming social media or reading short form news, you should instead seek out high-value content including books, blogs, and podcasts.

Below are two classic examples of creative and informative writers. They offer insightful content, which make for great weekly reading if you are looking to be informed as well as have some peace of mind. While we do not agree with everything, they provide well researched and unbiased perspectives. We are reading these and thought you’d benefit too:

Morgan Housel is one of my favorite writers. I’ve written previous newsletters citing excerpts from his book The Psychology of Money, which is a must read. In his latest blog, he discusses that it’s easier to theorize how we think we would feel during periods of market duress than how it actually is when we live through them. It’s easy to be greedy when others are fearful, until it really happens to your portfolio and your life. Morgan’s blogs are a must read.

In this article from Ben Carson's blog, he revisits stock market history during the worst of times, and especially during geopolitical issues.  While the market is often counterintuitive and forward looking, it’s not always correct. Trying to understand the day-to-day movements during a time of war is confusing and impossible to predict.

Last, but not least, we encourage you to re-read this classic from Warren Buffet at the height of the 2008 Financial Crisis. Hang on every word because this could be easily applied right now.  

While it’s normal to be fearful during times like these, fears regarding the long-term prospects of America’s greatest companies makes no sense.

While news, stock prices, and earnings may be bumpy in the near term, they will undoubtedly be setting new profit records in 5, 10 and 20 years from now.

Like Warren, we cannot predict the short-term movements of the market and we don’t know which way the market will move in a month or a year from now.

But what is likely is that the market will move substantially higher well before this is fully resolved.

As Buffet famously said, “If you wait for the robins, spring will be over.”