Fairway Market Perspective

By: Mark Weiskind

I guess I can say I’ve been around the business for a long while now.  As when in moments like our world is currently going through, I unfortunately am reminded so vividly of feeling this way before. The uncertainty, the doubt, that feeling of “I can’t believe this is actually happening”…and most impactfully, the fear.  I sense definite parallels to the period right after 9/11.  Our country and the world were dealing with real life and death issues, just like now.  We seemed to wake up to new fears every day, concerned about another attack, about anthrax and other weaponized drugs, about how New York would ever recover. Travel came to a halt, people were afraid to leave their homes, our government’s response was questioned, and it seemed like life as we knew it would never be the same. The stock market was down 7% the day after 9/11 and down by about 15% by the end of the week…after already being in a bear market after the dot-com bubble burst.

I see parallels to 2008 as well, when the financial crisis hit. It felt like every day I’d wake up and turn on CNBC to news of another company on the brink of collapsing, additional layoffs, the government trying to figure out how to stem the tide and another major selloff in the stock market that eventually cut market valuations by more than 50%.  In both cases, we were dealing with something we’d never seen before.  With things we never comprehended ever even happening.  It truly was surreal, just as things feel so surreal today.

A key common element in each of these events was fear. Fear of the unknown. Fear for myself and my family. Fear for my job, for my portfolio, for my financial security. Fear is such a strong emotion, it has a tendency to override everything else and I sense that feeling becoming pervasive today.  But, in both 2001 and in 2008, as bad as things felt, as scary as they were, we came out the other side.  In fact, those that didn’t panic, but rather took some action to take advantage of the short-term turmoil were able to generate considerable long-term wealth. Warren Buffett’s famous quote about “be fearful when others are greedy and greedy when others are fearful” proved prescient once again.

Through these dark clouds and uncertainty, we will eventually come out the other side of this crisis.  In all our planning, we anticipate markets like this. We can likely never see the catalysts that cause them, but we recognize that ugly bear markets happen on average twice per decade. So whether you are 40 or 80, you’re likely to see at least several more of these environments in the future. It’s why diversification is so important; it’s why we have cash on hand to meet all cash flow needs in the coming years; it’s why we have an investment strategy that keeps us on plan and avoids the tendency of emotions to take over; and it’s why we always say money in stocks should be money we know you don’t need for at least five years. Because these seemingly impossible to occur events unfortunately happen with some frequency.

So, some key points are:

  • The last thing anyone should do is make emotional, fear-driven actions that vary from your long-term focused financial plan
  • If you can keep your eye on the long-term ball, just like in 2001 and 2008 (and every previous bear market), there are likely tremendous wealth-creating opportunities to be taken during these environments, as long as you don’t hyper-focus on trying to perfectly catch the bottom
  • We will be in touch as much as possible and are here any time you want to talk. So don’t hesitate to reach out anytime, about anything you are worried about.

Finally, I want to address Fairway and our business continuity planning.  As of now, we have no plans to close our office.  But, things remain fluid.  We have reviewed our plans with all our employees. We all have the ability to work from home as needed, with full access to all our systems, emails, trading platforms and data. Our office phones can be forwarded to our cell phones. We have internal texting capabilities that actually make it faster to text a colleague anywhere in the world than it is to get out of our offices and talk face to face. So, we don’t expect any disruption in service or communication whatsoever in the event we do need to close our office.

We will continue to be in touch, but please don’t hesitate to reach out to the Fairway team if you want to talk.

Stay safe and healthy…