September 23, 2022
It is clear by now that 2022 will be a bad year in the market. As an eternal market optimist, Newsletter #43 was going to be packed full of explanations and examples of why we will be fine. But as I write this, there is simply nothing cheerful or upbeat to say.
Except for this—regardless of how bleak this looks, it will get better. And when we look back at this year-long depressing dip, we will wish that we had bought more. We cannot see the future—but we can study the past, and there has never been a recession or bear market that has lasted forever. This one will pass—as have all the others.
So, while I may not be my ordinarily cheerful, happy-go-lucky self, I’m not worried. Admittedly, I’m a little grumpy, but not overly so. We have seen worse—and I mean a lot worse—and inevitably, we look back and think, why didn’t I buy more then?
Well, for the record, we are buying here and there. We’re reinvesting dividends, and when those monthly deposits come in, we’re picking up some pretty good bargains. Some days I feel like an absolute genius—but recently, in this market, it doesn’t take long for me to learn humility all over again. And for the millionth time, I remind myself that daily movements mean little for investments intended for years.
Not too long ago, I had a friend from my Loyola days (2000-03) who owned a couple hundred shares of McDonald’s (ticker MCD)—we would joke with him that his stock was selling for the same price as a bag full of Happy Meals. I wittingly pointed out to him that at least with the Happy Meals, we would get some toys for the kids—all he was getting from his MCD holding was misery. Today, MCD sells for $256-ish, and instead of a toy, they reward him with a 2.2% annual dividend. I don’t mention it to him anymore.
Even as recently as March of 2020, we could’ve bought MCD for $81 cheaper than today. And don’t even look at how cheap Exxon was selling for during the initial COVID outbreak.
Please try not to obsess over paper losses—let me worry about that. Just know that I believe (based on the history of the world) we will be back stronger than ever. And if we focus on things we can control, we will, in time, look back and say, wow—that was a nasty ride—I’m glad I held on.
Thanks again for reading. Please call us if you want to review your accounts (remember, it will be a bit depressing) or if you have any questions. Keep plugging away, MK
