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Second Quarter Commentary 2021

Updated: Sep 22, 2021

Perspective and Proportion

If you look up the origins of the word “news,” it is said to be an acronym of North, East, West, and South. News is supposed to give you and me a well-rounded perspective, a sense of proportion, though it hasn’t done a very good job of it as of late.


We need to stay grounded and keep a long term perspective: I didn’t grow up in a wealthy family, but I have been in the investment management business for over 30 years and have benefited from many interactions with successful individuals and families, and I have learned the value of staying grounded and keeping a long term perspective. Seasons come, seasons go, and then they come around again. There really is nothing new under the sun.


It is a comforting thought, and a hopeful one as well. I’ve found that if I don’t get caught up in worrying about the “new” issues the current times throw at us and instead look at the big picture, everything becomes much clearer.


Avoiding the pitfalls of the transient is a vital part of setting yourself up for steady, long-term success, because in the world we live in, everyone is constantly bombarded by the new and ever-changing.


For example, have you asked yourself recently, “Should I get into Bitcoin?” Here’s the scary thing: there are no barriers to entry for creating a cryptocurrency. Almost 10,000 different cryptocurrencies have been created to date - and a quarter of those have already gone to zero. In my opinion, going to zero is cryptocurrency's destiny, unless they actually are tied to something of value like barrels of oil, acres of farmland, or even gallons of buttermilk.

Cryptocurrencies like Bitcoin look a lot like a “greater fool” game. A person who buys it believes that they can later sell it for a profit because a greater fool will buy it at a higher price, selling it to a “greater fool.” Buying cryptocurrency is likely better than buying lottery tickets and Iraqi dinar...and likely worse than gambling in Vegas, at least if you lose in Vegas they may comp your room. In the short run cryptocurrencies can increase to very high prices - but in the long term, those who are involved with it most likely lose everything. Because of these reasons, I cannot recommend investing in cryptocurrencies.

This is just one example of how the ever-changing “new” things in the world can distract individuals from the path that brings us the most long-term success.


Understanding Yourself: Don’t Let the World Manipulate You

I found Robert B. Cialdini’s Influence: The Psychology of Persuasion to be an excellent read, because it opened my eyes to the ways that we are all subconsciously persuaded to do certain things.

One of the examples given in the book is that it is only natural to want the approval of our peers. It is a completely human desire. Of course, to fully pursue the best path or plan of action for ourselves, we have to shake free of the fear of others’ opinions. Our identities do not lie in their opinions - and yet so many of us live bound by undiagnosed peer pressure. The dangers of blind compliance - or getting into risky things such as cryptocurrency - just because others you know advocate it can result in disaster.

Fortunately, when we are aware of such tactics, we can counter them and ensure that we are not being manipulated. I’ve found that the freedom to pursue the best path for my life is too valuable a thing to give up, so I strongly recommend this book if you are looking for a good read this summer.


Things to Keep in Mind as You Pursue Your Goals


  • I have found that getting caught up in the unknown doesn’t help anyone. There are many distractions in this world, and it is all too easy to get caught up in the “what-ifs.” Believe me, I know. Vision is a great thing, but all the vision in the world cannot save you if the unknowns pull you away from what really matters to you.


  • Keep your eyes on your vision. Don’t let the transient distract you from the steps you need to take in order to have a meaningful retirement and the ability to provide for your kids, grandkids, and the charities that mean the most to you. What matters to you is important, even if (especially if) goals are of the long-term variety. I believe that none of us can afford to ignore our personal visions for our futures.


  • The future is something to look forward to. I know, I know. No matter how many times we are told to have faith in the future, our natural inclination is going to be to fear the future. That’s just human nature...it is only natural to be wistful for the past, or past events, regardless of how good it really was. But here is the thing: it gets better. Would you trade your kids or grandkids to be younger? Of course not. Bearing that in mind as you face the ups and downs of life can radically change your outlook. We all have to climb a few summits and slog through a few valleys, but it gets continuously better as we learn and experience more and more.


I have found that this applies to both the daily grind and a patient individual's finances, so smile. The future is bright.


Your goals, both for yourself and for your family and legacy, are not something to downplay. We have to keep a long-term perspective to prevent ourselves from getting too wound up about the minor ups and downs that come along. Taking a step back and looking at situations in proportion to what really matters is a game-changer, so let’s not let distractions take away from our focus and direction in this season...and every season ahead.



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