While it sounds like Warren Buffett, I’m not sure who asked why we obsess over the problems we do know, and we ignore solutions we don’t know. I know that sounds like blind faith that we can always deal with problems when they develop, but stranger things have happened. For example, Ben Bernanke has done things nobody ever tried before. Is there nobody else out there who will try things that have never been tried before?
After all, there are many things that can go wrong landing an airplane, like wind sheer, collapsed wheels, electrical fires, etc. I have no idea how the pilot would react to those problems, but I have confidence an experienced professional pilot will try everything he can to land the plane safely. Would my worrying help him land the plane?
No airline passenger or investor needs to read eight different trade journals to know there is another bear market coming. There is always another one out there, somewhere in our future! While I suspect the next one will be sudden, it does not mean I should be afraid. Would my worrying prevent it?
The joy of air travel is that it reminds us to be somewhat trusting. The job of investing is that it reminds us to always keep our trigger finger near the SELL button . . . just in case.
The conventional wisdom is that an investor should “buy and hold,” and there are numerous scholarly articles on how investors tend to sell after the peak and buy after the trough. That’s the problem with conventional wisdom, it is too conventional. Bear markets will be more sudden and more severe in the future, but that’s unconventional wisdom. So is keeping your trigger finger near the SELL button!