Tough days these days in financial markets.
I wrote about today’s market condition on our May 2015 blog post titled the Great Beta Deflate. It was our first post. You can read about it here: http://razorbilladvisors.com/the_great_beta_deflate/
People say it’s like 08. It can’t be 08 because we’ve been through 08. It’s not different this time because it’s never really the same twice. There are always some similarities and it’s never completely different but it is never the same either.
Here’s something that’s the same as 2008. These market conditions remind me of scuba diving. I’m not talking metaphor here, I highly dislike metaphors but the human experience works using analogies. When the market start to sink (and we invariably experience greater volatility) to me like we’re applying a pressure akin to the one felt when deep diving.
I like it.
Here’s something I heard when I was getting certified. The worse thing you can do when you are 80 feet below is panic. Panic is your worst enemy. When panic seizes you, your mind begins to thrash and it’s then that you might do something really stupid and self destructive. Something you won’t recover from.
Same goes for investing. When markets speed up and you get caught too levered or in the wrong trade it’s always good to think harder. I’m not advocating a market stance here, I’m no telling you to go long or short, to buy or sell. If you want to read about our positioning and our thoughts read our 2016 Outlook you can read it here http://razorbilladvisors.com/resources/termsheets. As a disclaimer I would say that our outlook will change as time progresses.
What I am advocating is for greater thoughts and reflection. It’s time to really focus on your investment thesis and your risk tolerance. Whether you are institutional, family office, high net worth or just managing your family nest egg, when things start to move lower that’s the thing to do.
We’re deep diving again. Hard to believe it happened 4 times in the last 20 years. But here we go again.
If ever you feel panic coming over, remember that some of us like it down here.