My guess is Bobby wins 80 – 90% of the match ups. It’s amazing what he can do in such a short amount of time. Whether it’s braising ribs or developing a soup with deep flavor, he seems to be able to predictably deliver in a way his competitors can’t in such a
short period. I bet the odds would be tipped in the competitor’s favor (or at least more equal) if they had more time though. Who knows what depth of flavor these top quality chefs could cook up if they had 24 hours to develop flavor in a dish instead of forty five minutes. Time is a critical ingredient for really great cooking.
The value of time cannot be overstated in your portfolio either. The length of time before invested money has to be spent is, I believe, the most critical factor after diversification in portfolio design. Time is what allows you to breathe easier when the stock
market experiences short term fluctuations. Time is what allows you to ignore click-bait advertisements online telling you to take action “before it’s too late”. Time is also what enables you to implement sound planning strategies to manage taxes and accomplish big goals.
The end of the year can sometimes be bumpy for stock markets with a seemingly above-average number of up and down days. The end of November and early December this year are so far acting as reminders that the global economy is still recovering, the COVID-19
situation is still dynamic and uncertainty around how policymakers will respond going forward continues to be top of mind. Uncertainty is not the biggest threat to your wealth. Reacting to uncertainty is. Stay calm. Time is on your side. Reacting with unnecessary portfolio moves hurts performance because it takes your most powerful tool out of your hands.
My advice is to stay the course amidst uncertainty knowing the economy still has considerable distance to go before we have fully recovered. Supply chains are not fully operational yet, the job market is on fire, consumer demand remains high and cash on hand is at or near all time highs across nearly every demographic.
Asset valuations have increased. However, the valuations are not mathematically unreasonable given the historic situation of very low interest rates being used in the discounting models and expectations for future growth. In addition, remember that assets are
not apples. They are not governed by the law of gravity that states "what goes up must come down". They can continue to increase over time. The reopening of supply chains alone provides a basis for expecting continued growth. I expect the recovery to continue to lurch along up and down with markets in tow. However, these factors all provide a reasonable basis for measured optimism and expectations for a sustained recovery.
Thank you for your trust and your time.