We Are Overdue For A Stock Market Correction

How bad was the Great Depression?

A timely, eye-opening Wall Street Journal article by Jason Zweig.

“The Dow peaked at 381.17 on Sept. 3, 1929. It finally hit bedrock at 41.22 on July 8, 1932, down 89.2%. In less than 35 months, a dollar invested in stocks shriveled into barely more than a dime.”

How wrong were the experts?

“In a newsreel from Oct. 30, 1929 . . . Irving Fisher, the nation’s leading economist and a Yale professor, proclaimed: ‘It now looks as though the bottom of the market had been found.’

The market found the bottom, all right—84% lower and almost three years later.”

How long did it take for the market to rebound?

“The Dow didn’t surpass its 1929 high until Nov. 23, 1954, a quarter-century later.”

How many people held their stock investments long enough to break even? A clue.

 “A 1954 survey by the Federal Reserve found that only 7% of middle-class households said they preferred to invest in stocks over savings bonds, bank accounts or real estate.”

How are we still getting the lesson of the Great Depression wrong?

“No one who lived through the crash of 1929 would agree with the view, advanced in the late 1990s, that stocks become riskless if you hold them long enough.”

Zweig’s cogent conclusion:

“To be a long-term investor in stocks, you have to be prepared to lose more money for longer than seems possible. Anyone who takes that risk lightly is likely to sell out, in the next crash, near the bottom.”

The investors first task, know your time horizon. If it’s less than 10-25 years, proceed into equity markets with due caution.

 

Weekend Assorted Links

1. Radical Survival Strategies for Struggling Colleges.

“Moody’s projects that the pace of closings will soon reach 15 per year.”

Sobering. How will my employer, Pacific Lutheran University fare? If it was a stock, I would not buy it because of the larger context, but I am cautiously optimistic about our future because our brand new president is as smart an entrepreneur as I’ve known. He’s quickly learned about the never ending peculiarities of academic culture and faculty-based governance. But the Warriors may not have much success this year even with Steve Kerr as coach.

2. Payne Stewart’s daughter writes him a letter twenty years after his tragic death.

“People say time heals all wounds, but I don’t believe that. Sure, as the years have gone by, I’ve learned how to manage my sadness in losing you. But the pain never really goes away. I think about you every day, miss you every day.”

3. It turns out there are (really) bad questions.

4. How to Travel Like a Local. Thorough.

5. Why Don’t Rich People Just Stop Working?

“Are the wealthy addicted to money, competition, or just feeling important? Yes.”

6. Song of the week. So effortless.

Some Things I’m Learning About College Students’ Mental Health

  • Many are super stressed by their parents’ financial sacrifices.
  • Some parents from developing countries “don’t believe” in mental health challenges like anxiety and depression, so they discount its importance. They believe their young adult children can “will themselves” to feel better.
  • College is not as easy a time and place to make friends as is commonly thought. Loneliness is real.

Setting customary anxiety about academic performance aside, imagine worrying incessantly about your family’s finances and not having many friends to confide in. And then, not being able to talk to your parents about anything of substance.

 

Cold Water Craziness

I follow the Western Washington Open Water Swimmers on FaceBook. Check out their page sometime. Some subset of them swim at Alki Beach in West Seattle every day of the year. Some without wetsuits.

Hardcore doesn’t do it justice. They are out of the minds, but I greatly admire their tight- knit, inclusive, joyous community. They have a very good time freezing their asses off together. Over and over.

A few weeks ago I felt distressed when my YMCA pool, due to a partially broken furnace, was 76 degrees for a week. My excuse is I lack the necessary body fat, but cowardice is prolly the heart of the matter.

And check out this supe-cool pictorial of even heartier open water swimmers in Scotland.* Their exuberance is incredibly infectious.

*It may take awhile for the 59 pics to load.

 

A Friendship You’ve Had That Would Surprise

Last week’s Demo debate ended with this set up and question from Anderson Cooper:

“Last week, Ellen DeGeneres was criticized after she and former president George W. Bush were seen laughing together at a football game. Ellen defended their friendship, saying, ‘We’re all different, and I think that we’ve forgotten that that’s okay.’ So in that spirit, we’d like you to tell us about a friendship that you’ve had that would surprise us and what impact it’s had on you and your beliefs.”

I thought it was great, in part because no one could’ve prepared for it. Poor Julián Castro for having to bat lead off. He kept swinging wildly, and missing badly, seemingly thinking, “If I just keep talking, maybe I’ll eventually utter something coherent.” But it wasn’t to be, he couldn’t come up with a single name.

Andrew Wang talked about a trucker he spent a few hours with as a part of a recent political event. Not someone he’d ever talked to before or is likely to ever talk to again, thus failing to earn even partial credit.

Amazing, not one true friend markedly different than them.

Buttigieg ran circles around those two and most of the others. He noted that the people he’d learned the most from were friends he’d made in the military:

“People who were radically different from me—different generation, different race, different politics—and we learned to trust each other with our lives.”

Then Buttigieg pivoted and called for national service, a worthwhile proposal deserving of discussion. One argument in support of it? The probability that future candidates’ answers to a “surprising friend” like question will be far more compelling.

 

Don’t Box People In

My advice to myself after reading this short article, “Emotional Michael Jordan unveils first of two medical clinics in Charlotte”.

One day in the spring of 1984, MJ walked into UCLA’s Wooden Center where a scrawny senior history major, who would one day become a famous blogger, was on fire. After helping my team hold court again, I stopped to watch MJ run with an assortment of professional and UCLA varsity ballers. In town to accept the John Wooden Award, he was on another level, even compared to me.

Like any basketball fan I suspect, I always admired his talent, the ease in which he moved, got open, shot, defended. Simultaneously, I was always dismayed by his refusal to use his platform and incredible wealth to benefit others. Did he have his social conscious surgically removed I wondered?

I shoulda been more patient. I apologize MJ for not giving you the benefit of the doubt that someday you’d most definitely give back in the most meaningful of ways. Good on you.

 

Passion Till The Very End

The word of the day, harangue, a lengthy and aggressive speech. One could add “see Bernie Sanders”. I’m not a fan of Bernie’s oratorical style, but I’m in total awe of his passion especially given the fact that he’s 78 years old.

By 78, a lot of men are dead, hell, Bernie peered over the abyss last week. Elderly men and women in their eighth, ninth, tenth decades often struggle with more than just declining health. There’s the huge psychological challenge of having a purpose to continue living. Something beyond watching television and marking time.

That’s not a problem for Bernie, nor was it for Harold Bloom who died earlier this week. The New York Times described Bloom as the “most notorious literary critic in America” explaining:

“Chiefly he argued for the literary superiority of the Western giants like Shakespeare, Chaucer and Kafka — all of them white and male, his own critics pointed out — over writers favored by what he called “the School of Resentment,” by which he meant multiculturalists, feminists, Marxists, neoconservatives and others whom he saw as betraying literature’s essential purpose.”

I find his unabiding passion even more fascinating than his contrarian intellect for which he’s best known.

Dig this:

“Professor Bloom called himself ‘a monster’ of reading; he said he could read, and absorb, a 400-page book in an hour. His friend Richard Bernstein, a professor of philosophy at the New School, told a reporter that watching Professor Bloom read was ‘scary.’

Armed with a photographic memory, Professor Bloom could recite acres of poetry by heart — by his account, the whole of Shakespeare, Milton’s ‘Paradise Lost,’ all of William Blake, the Hebraic Bible and Edmund Spenser’s monumental ‘The Fairie Queen.'”

In junior high school I memorized some bible verses in Confirmation classes, I just can’t remember which ones.

The Times adds:

“. . . his output was vast: more than 40 books of his own authorship and hundreds of volumes he edited. And he remained prolific to the end, publishing two books in 2017, two in 2018 and two this year: ‘Macbeth: A Dagger of the Mind’ and ‘Possessed by Memory: The Inward Light of Criticism.’ His final book is to be released on an unspecified date by Yale University Press, his wife said.”

Further evidence of his all consuming passion, he taught his last class at Yale last Thursday.*

I texted an academic friend who followed Bloom’s work this humorous excerpt from the Times. Years ago Bloom predicted:

“’What are now called ‘Departments of English’ will be renamed departments of ‘Cultural Studies, where Batman comics, Mormon theme parks, television, movies and rock will replace Chaucer, Shakespeare, Milton, Wordsworth and Wallace Stevens.”

“He nailed that!” my friend texted back.

May you live long, similarly passionate lives.

*Bloom looks really spent in the 2011 picture. For shit’s sake, can we please revisit mandatory retirement provisions? How about you have to hang em’ up at 88 years young?

 

 

 

 

The Bane of Every Teacher’s Existence

Students act out. The question is why?

  • It’s personal. They don’t like you. Never have, never will.
  • It’s karmic payback for the way you treated your teachers.
  • It’s a religious conspiracy. God placed them in your classroom to make your life as miserable as possible.
  • It’s in their nature, they can’t help it, their brains aren’t fully developed.
  • They are compensating for too little attention elsewhere.
  • They’re so hungry, they’re distracted.
  • They’re distracted and upset about other outside-of-school life challenges.
  • They don’t understand what you’re asking them to do.
  • They understand what you’re asking, but don’t have the necessary background skills and/or knowledge to successfully complete it.

Most of the time, it’s the last two. How frustrating would it be if you felt yourself falling behind your peers?

 

What Can We Do To Improve Young Adult Mental Health?

My first year writing students are 18-19 years-old. Here’s the prompt for their first paper:

     Irvine argues that people often lack a “grand goal of living” and a coherent philosophy of life because our culture doesn’t encourage thinking about specific reasons for living; instead it provides them with an endless stream of distractions. He contends you’ll most likely squander your life without a guiding philosophy. He adds that even if you have a “grand goal in living” and can explain its importance, it’s unlikely you will attain those things in life you take to be of greatest value if you lack an effective strategy that specifies what you must do as you go about your daily activities. Explain why you agree or disagree with Irvine’s assertions. Also, explain a few things you want out of life and why.

Irvine proposes an updated version of Stoicism as a guiding philosophy. Most of my writers find meaning in some stoic concepts, like the trichotomy of control, but generally aren’t down with Irvine’s thesis that they need a “grand goal of living”. Most argue they’re too young to have formulated very specific life goals, let alone one “grand” one. Often, they thoughtfully point out that a highly detailed roadmap doesn’t make sense given life’s unpredictability.

When it comes to what they want out of life, an increasing number want improved mental health. It’s difficult to overstate the extent of young adults’ anxiety today. When I listen to them describe their anxiety and depression in class and read about it in their papers I have two reactions. Overwhelming empathy and curiosity as to what the hell is going on.

The third episode of the Happiness Lab podcast with Laurie Santos, “The Silver Lining”, might provide a clue. It’s about our tendency to compare ourselves to others who we perceive to be the most well liked, the most social, the most wealthy, the most together, the seemingly most happy. The episode’s title comes from research into Olympic athletes that suggests bronze medal winners are much happier with their medals than silver medal winners because silver medal winners are focused on not having won gold while bronze medal winners are focused on everyone that didn’t medal at all. This concept, “point of reference”, partially explains why happiness can be so illusive.

A Cornell psychologist in the episode contends social media compounds this problem because everyone carefully curates their online image to appear artificially happy. Among other remedies, Stoics advocate for internal goals to counter our self-sabotaging “point of reference” tendencies.

The gravity of the situation has me convinced that there’s no one explanation to “what’s going on”. Another factor could be the pressure my (admittedly selective) students feel to have their adult lives figured out just as they’re beginning them—whether to go to college, how selective a one, how to pay for it, what to study, what internships and other resume building activities to pursue, whether to go to graduate school, which career path, which grand goal for shits sake.

Parents, intensely worried about the vagaries of the economy, and desperate for a return on their considerable college investment, think that if their young adult children just pick the right thing to study—nursing, engineering, and other pre-professional fields—and develop a detailed plan, their college graduate sons and daughters won’t end up living in their basements.

This was what I was thinking about when struck by a related idea during a recent run. This time of the year, in North Olympia, Washington, it’s pitch black when running before work. Most of the streets are not lit, sometimes there’s fog. My uber-headlamp provides about 20-25 yards of visibility.

North Oly roads roll with a constantly changing mix of gentle ups and downs. Picture ocean swells, the Palouse in Eastern Washington, or the Norwegian countryside. Normally, I realized during the run, seeing roads ahead tilt upwards plays with my mind. At least a little. “Here it comes,” I think, “this is gonna take a little more effort.” And then, “Okay, almost topping out, hang in.”

But on this pitch black, foggy, autumn run, there was no such internal dialogue because I COULDN’T SEE AHEAD. The only way I knew I was starting a climb was my breathing became more labored. “Oh, okay, climbing now.” Because I couldn’t see the road tilting upwards ahead of time, my mind was free of that small, subtle nagging dread of having to work harder. As someone whose prone to look too far down the road of life, I was digging running in the moment. Don’t tell me what’s ahead, let me just be present.

Freed of anticipatory dread, my mind turned to my students. They lament how their teachers, beginning in middle school, ask about their life plans. And how it continues through high school. And how their parents too often pressure them to have a plan.

Some of them end up crafting faux-plans just to stop the insanity. As a placeholder of sorts. Some, like a previous writing student, declare nursing upon entering college only to realize in the middle of our first semester seminar that they didn’t really like science.

Maybe we should give our high school graduates headlamps and encourage them to focus at most on the year ahead especially since life is fragile and no one is guaranteed a long life.

What if our message was this.

In the next year, while working, traveling, or going to college; focus on improving your health; nourishing your spirit; investing in new friendships; finding one way to make others’ lives better. Don’t worry unnecessarily about the mountains and valleys that lie ahead in the distant future. You’ll be okay. And if not, let me know how I can help.

Young adults’ mental health might improve.

 

 

 

 

What Podcasts Should I Listen To?

In a shameless effort to appear a wee bit younger and hipper, I’ve finally started listening to podcasts. Sometimes during the commute, but primarily when I run and cycle with me, myself, and I.

Here are ones I’m enjoying:

Against The Rules by Michael Lewis. About the decline of “referees in American life”. Maybe things really are at least semi-rigged.

The Happiness Lab by Laurie Santos. Yale prof who created a Positive Psychology class that went viral both on campus and later on-line. Since reading this, I’m a positive psychology skeptic, but so far my bullshit alarm has not sounded. Episode 2, “The Unhappy Millionaire” is particularly interesting.

Bundyville by Leah Sottile. Everything you wanted to know about Cliven Bundy and his anti-Government hangers on, but were afraid to ask. Thorough and thought provoking.

The Retirement Answer Man by Roger Whitney. Granted, this one won’t help me appear any younger/hipper, but great case studies of ordinary people trying to save and invest enough to stop working.

Bogleheads on Investing Podcast by Rick Ferri. Interviews with smart financial analysts who adhere to Jack Bogle’s philosophy of investing. Bogle is the recently deceased founder of The Vanguard Group, an investment management group.

Conversation with Tyler by Tyler Cowen. One intellectual talking to others about everything under the sun. Recent guests included Samantha Power and Masha Gessen. Next up, Salmon Rushdie.

The Nation, Start Making Sense. Insightful lefty analysis of current events. My conservative friends will say “insightful lefty” is an oxymoron, but I will not take their bait. :)

What else dear reader should I be listening to on my now pitch black, drizzly morning runs? Think politics, social sciences, personal finance, sports, comedy.