Below is an excerpt I wrote for our firms bi-monthly newsletter on April 21st 2020. I am posting it my my blog as future reminder of where my thinking was at during this crazy time in our lives personally and professionally.
We live in a relative world at the moment, so relatively speaking I hope everyone reading this is doing well (or possibly even great). This week my oldest daughter’s reading and writing project for school is focused on identifying facts vs opinions in several essays. Wow, is that ever a timely topic. In a ‘normal’ world it is hard enough to discern fact vs opinion and that echo chamber has been ratcheted up exponentially the past 5 weeks. In conversations with clients/family/friends I have tried to break things down into 3 categories and put an emphasis on what are facts vs opinions:
1) The virus itself – on this I am not qualified to discern facts from opinion. While I have read as much as I can on it I have nothing to offer other than a summary of what seems to be mostly opinions of experts. Facts take time, and there just hasn’t been enough in some areas to validate/verify them.
2) The Economy – it is bad (pretty sure that is a fact?), but how bad and for how long – we don’t know. Again that will take time. I don’t know which of the letters in the alphabet soup our recovery will follow, but as I have said many times I don’t know is a sufficient answer absent the evidence of facts. (More on this below)
3) The Stock Market– bear market bounce or pricing in signs of a recovery? Check back in 6 weeks to 6 months. Personally I have a mental debate on this several times each day. There is plenty of ‘evidence’ to support both sides of the argument.
Leaving aside number 1 (as again I just don’t feel qualified to opine on it) and addressing numbers 2 and 3 ‐ in my opinion we have the unstoppable force (decline in the economy) meeting the immovable object (gov’t stimulus – in the US and globally). The Fed/US Gov’t seems to be willing to throw every single thing it can at this problem – only time will tell if it worked, and also what the consequences of this will be (opinions galore in this sandbox). It is more what is happening on the margin that matters (opinion). Economic news will be really bad, but really bad is better than awful. At some point maybe that news turns to ‘just’ bad, which again is better than really bad. Personally I believe we can overcome the challenges, so I guess you could say I am hopeful and optimistic while still being aware and concerned (about a number of things). In the grand scheme perhaps this whole event/pandemic will serve as a wakeup call in many areas of life/business/etc. Framing expectations is helpful, again I am optimistic looking out 3 years that our economy can (WILL) recover. 3 weeks, 3 months from now, flip a coin. These two thoughts do not have to be mutually exclusive.