impressed........................

 

For practical purposes, the financial memory should be assumed to last, at a maximum, no more than 20 years.  This is normally the time it takes for the recollection of one disaster to be erased and for some variant of the previous dementia to come forward to capture the financial mind.  It is also the time generally required for a new generation to cone on the scene, impressed, as had been its predecessors, with its own financial genius.

-John Kenneth Galbraith, A Short History of Financial Euphoria

What would we do without narratives.....?

 

All is not well with the US economy, but the narrative of doom and gloom is being oversold as well.

-Brian Wesbury, from this post

Staying awake at night..........................

 

............................with Jared Dillion:

There is a chart that gets passed around from time to time which is a chart of the S&P 500 going up annotated with all the reasons why it might go down over the last 40 years or whatever, the most recent example being the Iran War. The price of oil goes up 50%? Fuck you, stocks are going up anyway. That has been our experience, pretty much, for most of the last 20 years. Every worry, every pullback has been a buying opportunity.

Now, it doesn’t take a galaxy brain to figure out that this dynamic might not continue indefinitely. 

-------------------------

We just elected large-C Communist mayors in Seattle and New York. The Democrats are moving to the far left faster than you can say Hegelian dialectic. It seems as though the stakes are higher for each successive election, and it says something when Gavin Newsom is probably your most centrist candidate. Newsom would have been far to the left of Carter in the 1970s. But here we are, and the polarization is a freight train coming through your living room. 

Ah, recessions......................

 

Goodspeed has little patience with the moralising that claims recessions are a nation’s just deserts for periods of greed and moral decrepitude. He disapprovingly cites Alan Greenspan’s description of periods of “irrational exuberance” for which Greenspan suggested that downturns and recessions were just punishments. Goodspeed compares much of this sort of discussion to “the parables of Jesus or Aesop’s fables”: fine for moral instruction, but not really the prime causes of economic downturns.

-Joel Kotkin, from this substack post

Down is up........................

 

     Creation is composed of the descending movement of gravity, the ascending movement of grace, and the descending movement of the second degree of grace.

     Grace is the law of the descending movement.

     To lower oneself is to rise in the domain of moral gravity.  Moral gravity makes us fall toward the heights.

-Simone Weil, Gravity & Grace

Life is complicated.....................

 

In a world without truth, the future belongs to the most entertaining liars.

-Scott Pinsker, from this post on the wide, wide world of Bill Gates

thanks Chris

the pilgrimage...................

 

     These spiritual masters understood that a spirituality that begins in the acceptance that one is not "in control" necessarily involves a flexible attitude, which requires a mistrust of the rigidities of certainty.  If life is "unmanageable"—and, of course, at time it is—there will necessarily be sudden surprises, unexpected twists and turns, unforeseen detours.  In recognizing spirituality's—life's—open-endedness, we learn to be flexible and adaptable, thus protecting ourselves from the tendency to want to fix things "once and for all."  Hold fast to the "now" means "hang on and enjoy the ride," for we never know (and we can't control) where the vicissitudes of the pilgrimage that is spirituality will take us.

     The modern mind—so enthralled by technique, so oriented to efficient production and "bottom-line" results, so obsessed with comfort and predictability—approaches the concept of pilgrimage with wariness and puzzlement.  Why backtrack and sidestep when you can march straight ahead?  The word vicissitudes, with its promise of ups and downs, its suggestion of successes and failures, its reminder that we cannot "march straight ahead," is unsettling and disorienting for those who equate progress with perfection.

-Kurtz and Ketcham, The Spirituality of Imperfection: Storytelling and the Search for Meaning

again and again................

 

As the fourth-century monk Macarius emphasized, all improvement in spirituality is "a matter of falling and getting up again, building something up and then being knocked down again."

-Kurtz and Ketcham, The Spirituality of Imperfection: Storytelling and the Search for Meaning

Crystal ball time........................

 

Bull markets can last longer than you think but we can’t have above-average returns forever.

Therein lies the biggest risk in 2026…or 2027 or 2028 or some undetermined year in the future.

Eventually, above-average returns lead to below-average returns. Sometimes the biggest reason for bad returns is because good returns lasted for so long.

Predictions are hard.

stop right there.....................

 

My only line of thinking right now is the range of outcomes has increased substantially in the past month or so.

-Ben Carlson

richer......................

 

The one law that does not change is that everything changes, and the hardship I was bearing today was only a breath away from the pleasures I would have tomorrow, and those pleasures would be all the richer because of the memories of this I was enduring.

-Louis L'Amour, Galloway

recurrences......................

 

As Professor Arnold J. Toynbee indicates in his six-volume study of the laws of the rise and disintegration of civilizations, schism in the soul, schism in the body social, will not be resolved by any scheme of return to the good old days (archaism), or by programs guaranteed to render an ideal  projected future (futurism), or even by the most realistic, hardheaded work to weld together again the deteriorating elements.  Only birth can conquer death—the birth, not of the old thing again, but of something new.  Within the soul, within the body social, there must be—if we are to experience long survival—a continuous "recurrence of birth" (palingenesia) to nullify they unremitting recurrence of death.

-Joseph Campbell, The Hero With A Thousand Faces

Good thing, since that is where he works.........

 I am endlessly fascinated by the human element of financial markets. It’s a constant cycle of fear, greed, envy, panic, and euphoria. The financial markets are like a laboratory for testing human emotions and behavior on a grand scale.

Things can go from boring to exciting in the blink of an eye because human nature never changes.

I love the stock market.

-Ben Carlson, from here

not-so-subtle downsides.............

 There are a million ways to get rich, most of which involve exploiting specific niches and one-off opportunities, to say nothing of luck. Universal rules about how to get rich are hard to come by.

But losing money, or losing happiness when you have money, or becoming a slave to your money – those stories tend to have common denominators. They are so common you can call them laws.

-Morgan Housel, from this post

in the heat of the moment...............

      More significant, perhaps, for his fate as a strategist was a trait he first exhibited here in the face of overwhelming odds: He knew when to quit and cut his losses.  This is a much-overlooked military capacity: in the heat of the moment to retain sufficient objectivity to recognize the prospect of sure defeat and then to summon the self-control to reverse course and withdraw.  For some—Grant, for instance—this proved impossible.  But Sherman's military career was studded with such moments, epiphanies of defeat, and they were emblematic of his eventual success.  He came to realize that in war there would be good days and bad days, but the ultimate objectives must always remain paramount.

-Robert L. O'Connell, Fierce Patriot: The Tangles Lives of William Tecumseh Sherman

About your prefrontal cortex...........

 For most people, decline is just not an unwelcome surprise, it is also a huge mystery.  We learn early on that practice makes perfect; there is plenty of research telling us that mastery comes from ten thousand hours of work, or some really high number like that.  In other words, life has a formula: the more you do something, the better at it you become.

     But then you don't.  Progress isn't a straight line upward, . . . So what explains the downward portion? . . . 

     A better explanation involved structural changes in the brain—specifically, the changing performance of the prefrontal cortex (the part of the brain behind your forehead).  This is the last part of the brain to develop in childhood and the first to exhibit decline in adulthood.  It is primarily responsible for working memory, executive function, and inhibitory mechanisms—that is, the ability to block out information extraneous to the task at hand, so we can focus and imp[orve our core skill.  A big, strong prefrontal cortex makes it possible for you to get better and better at your specialty, whether it is making a legal case, doing surgery, or driving a bus.

      In middle age, the prefrontal cortex degrades in effectiveness . . .

-Arthur C. Brooks, From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life

Cycles........................

      And in so far as the apparent prosperity is caused by an unusual plentifulness of loanable capital and a consequent rise in prices, that prosperity is not only liable to reaction, but certain to be exposed to reaction.  The same causes which generate this prosperity will, after they have been acting a little longer, generate an equivalent adversity.

-Walter Bagehot, Lombard Street: A Description of the Money Market (1873)

Whither the market in 2023.......?

 The only Wall Street strategist-type forecast I’m willing to make is this: The stock market will have a correction in 2023.

I’m not exactly going out on a limb here for one simple reason — the stock market has a correction every year.

My work shows over the past 100 years or so just 5% of all trading days experience an all-time high for the U.S. stock market. Invert that data and that means 95% of the time as a stock market investor is spent in a state of drawdown from an all-time high.

The stock market cannot go up every single day. In fact, historically the stock market is only up on roughly 55% of all days that it’s open and down on the other 45% of days.

-Ben Carlson

Longing for the day..............

 ..........when good news isn't bad news:

via

Staying calm is a super power............

 Think about all the bad news, economic or otherwise, of the past twenty-two years that might have caused you to stop investing, or to pull your money out of the market.  Just as a reminder: the Dow was 10,540 at the end of January, 2000.  It is 32,134 today.   For a more readable copy of the chart, go here.