I have spent the past four decades as a broker selling common stocks to individual investors and institutions. I am addicted to the market and love my work
I want to offer my experience and perspective as a tool for people to critically examine what they see and hear. This is all in reaction to something that has been a frustration of mine throughout my career–the 24/7 daily barrage of misinformed opinion and political speak that infects the investment thought processes of many. It is all about fear and sensationalism, having little to do with making money on a long-term basis.
I aim to take on the 24/7 media / political / punditry cycle and the barrage of bad news and the fear it generates. I aim to bring investors in off the ledge with common sense and the real life application of history and lessons learned in my 42- year career. I believe that the perspective from which you view headline and political speak makes a difference, and that in my experience most media output is noise and not useful in your decision process. To take this one step further, the media, political rhetoric and the Wall Street pundits do more harm than good as they create irrational fears and expectations.
One example (I have many):
My wife and I recently completed a major remodeling project. Our contractors were wonderful. They did a superb, hassle-free job. We have since had them back to take care of minor projects and have always enjoyed great interactions. On one such visit last summer (July 2012-in the heart of the Presidential campaign) talking about the political speak, I told them that based on what I was seeing, the economy was doing pretty well (as was the market). Things were not perfect (unemployment a tad over 8%, yet down from over 10%), but good things were happening. I also said that if the pols and media would just keep quiet, we might progress even faster.
I gave an example…
Mort Zuckerman, publisher of The New York Daily News, U.S. News and World Report, real estate mogul (est. net worth $2.4) and pundit has said frequently over the past two years: “This is the worst economic situation we’ve seen in this country since the Great Depression.” I said this was pure bunk. One of our contractor friends took issue with my dismissal of Zuckerman’s hyperbole. He really was of the mind the country was in horrible shape. So I ask, “How’s your business doing?” He quickly replied, “Great!” Hmmm. Then I asked if he knew what the peak unemployment rate was in the heart of the Depression. His answer was “no.”
I enlightened him:
It was 25%.
– 25% heads of households–women for the most part– were not in the workforce
– . Banks were allowed to fail in droves, wiping out life savings.
– There was no FDIC. There were no unemployment benefits.
– This is what I would call dire and in no way comparable to July 2012.
Fast forward to 1982 and to the Reagan Administration where we experienced higher unemployment (11%), higher inflation and 15% to 20% interest rates.
Mort, the billionaire, for all of his business savvy, was guilty of significant exaggeration– not because he was stupid but because of political motivation. And if you had been waiting for Mort to sound the “all clear”, well you have missed a very nice move in the market.
BTW: When things were their bleakest in 1982, the Dow Jones industrial average managed to break out above 1000 to new highs and by the fall of 1987 had climbed to 2500 before the next major correction set in. As I am writing, it sits at 13,800– a few hundred points from its all time high.
This blog is not about stock-picking, but rather giving you, comfort in the midst of all the noise and the courage to be there when the negative noise is the loudest and the opportunity is the greatest.
I hope you find my blog helpful and I welcome your questions and comments.
The information presented in kortsessions.com represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain securities for illustrative purpose, names where I personally hold positions. These are not meant to be construed as recommendations to BUY or SELL. All investments and strategies should be undertaken only after careful consideration of suitability based on the risks, tolerance for risk and personal financial situation.