Having written in this blog for more than 6 years, I have the opportunity to look back and revisit what I had observed about the world during interesting times. One such time was 4 years ago, in March of 2009, when the stock market was at its lowest point following the Great Recession. Stock prices had fallen more than 50% from the high point set in October of 2007.
Today, those "losses" have been erased, as stocks now stand at new records on the Dow Jones Industrial Average, rewarding patient investors willing to look through the challenge.
To look back at posts published 4 years ago, I keyed "March 2009" into the handy search tool at the top-right of the TFP blog site. Here are some observations I was making at that time:
March 2, 2009, on the post, All We Have to Fear is Fear Itself, I wrote:
Either we are not students of recession history or we are giving too much attention to media reports. If the media weren't telling us "how bad things are," would we really perceive things to be as bad as we do?...
If I can make my tiny contribution toward a brighter future, I will ask anyone and everyone to stop watching, reading and listening to mainstream media.
March 9, 2009, on the post, Finding Beauty in Ugliness, I wrote:
In essence, the greatest human fear is that of the unknown. We would prefer to see something ugly in plain view than to feel and see the nothingness of the dark--and often the picture painted by one's imagination is an extended and magnified version of whatever emotion one is currently experiencing.
For example, in "bad times," as we are experiencing now, one's imagination will likely fill the empty spaces of information (unknown) with extreme pessimism and horrific images. Similarly, in "good times," one's imagination will likely fill in any existing empty spaces with over-confidence and positive images.
On March 18, 2009, in the post, Are Financial Plans Illusions?, I wrote:
While there is nothing inherently wrong with using the past to make certain assumptions about the future, financial plans become increasingly illusory when these assumptions are made in the presence of extreme emotion...
We can not change the past so there is no use in complaining or despairing over it; and much of our future success depends upon how we learn from our past mistakes; therefore it makes perfect sense to consider examples of faulty assumptions (illusions) made in the past that are colliding with reality now...
"All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse." ~ Benjamin Franklin
I summarize with a point: This exercise in reflection is not one of ego but rather one of humility. The presence of fear and panic in late 2008 and early 2009 was palpable and it certainly was not popular to say, "Things are not as bad as they seem."
Some of the greatest mistakes, both in finance and in life, are making faulty assumptions about the future based upon pattern recognition and emotion today: "If bad things are happening to me, there must be more bad things coming next." Equal and opposite, a string of fortunate events is no guarantee of more good things to come.
The greatest virtues in this regard are humility and contentment. When you realize that you do not know the future, and when you can be content with what you have now, you will not look into darkness and imagine either a treasure or a monster. In fact, you won't even look there because you have no desire to know; you reside in the light of the present.