I told you this was gonna happen

By David B. Armstrong, CFA | Feb 26, 2020 | Weekly Market Commentary

Here they come…everyone who was just dying to be right.  But look, OF COURSE THIS WAS GONNA HAPPEN!!!! 

It’s called INVESTING. 

Ben Carlson (@awealthofcs) summed it up in his blog from February 23, 2020.  It’s such an effective thought, I’m attaching a screenshot rather than explaining it.   

I’ve had some people scoff at my conviction…in fact, if I’m being honest, I’ve actually been fired for it.  

But you know what? We are not trying to resonate with everyone, we are just trying to resonate with SOMEONE.  And those “someones” that make up the clients of Monument, the believers, they have all done well following our convictions of patience and discipline. This includes: 

• Our emphasis on starting out with a Private Wealth Design that answers the question, “What’s the money for?” as the blueprint for the construction of the whole financial house.  
• Our portfolio management efforts which have created low–cost, tax–efficient strategies focused on quality stocks that don’t have to be traded. 
• Our focus on simplicity which has kept them out of the bullshit products that Wall Street firms love to sell – the ones that always tend to blow up or create some sort of liquidity problem. 
• Our drumbeat of having the cash you need for upcoming expenditures, so you don’t have to sell in environments like this. 
• Our analysis on recessions that has kept the panic at bay. 

This is all to their benefit.  The Believers. And the result is that they are on track to have the money for what it’s meant for—yes, even through drawdowns like this. I mean, come on, we are back to November–ish of 2019 levels…probably back where most people wish they had invested 3 days ago. 

Proof: 

 

 

 

 

 

(Thanks @davidInglesTV for above.) 

As it relates to the sell–off, Buffett said it well: “The real question is where are those businesses going to be in five or ten years?” 

As for MONCON, the levels of inputs have increased and may continue if a greater slowdown than what’s being priced–in materializes.  If the levels do continue to increase, we may see us go from a MONCON 5 to MONCON 4.  But remember, MONCON 4 is not an actionable event since it has a 50/50 chance of going back to MONCON 5.  If it were to go to MONCON 3, we would start to raise cash in our managed portfolio.  

Look from peak–to–peak, not from peak–to–valley. In other words… 

Keep looking forward. 

Dave 

 

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