4th Quarter 2018 Commentary
Falling stock prices, swings in stock prices, a December like this December. They hit all of our buttons. The big red buttons hard wired to the emergency exit centers in that part of our brain closest to the nape of the neck. It’s what we do when he have patterns (data and statistics to our forebrains, shapes moving in the dark to our hindbrains) instead of information (qualitative context, or a light in the hand). That’s when we react and make decisions as opposed to exercise judgment. We’ve seen it before, and we’ll see it again.
To help illumine the landscape before us, we’ll compare the events and reactions leading up to the Internet Bubble of 1999 and its aftermath (and how and why we positioned our portfolios to be so far away from that party) to the events and reactions leading up to today’s bubble (and how and why our portfolios are again so far away from the index benchmarks). The parallels are quite clear and, once seen, the path (or paths, for there are many alternatives) are much clearer.