For those who might have been a bit rattled by the recent market shakeup, your Foolish host Chris Hill is here with some support. Tune into this MarketFoolery to find out what moose crossing can teach you about market crashes, some advice for keeping calm in these dramatic times, how to keep on investing for the long run, and more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
This video was recorded on Aug. 6, 2019.
Chris Hill: It's Tuesday, Aug. 6. Welcome to MarketFoolery! I'm Chris Hill, and it's just me today. We have to talk about what happened on Monday. People are asking me, "What do you think?" I'm getting texts from friends of mine. I think a few things. So I figured I would share them here.
How are you doing, by the way? Are you all right? I know the market's moving higher today, but yesterday, my goodness. That was a little jarring, wasn't it? Worst day of the year for the market. At one point, the Dow was down 767 points. CNBC rolled out their prime-time special, Markets in Turmoil! I don't know if you watched it or not, but you have to just spend a minute and look online and find the logo. The logo is amazing. It's got this blood red color scheme, and in the background of the promotion that CNBC came up with is a rampaging bear that looks like it just inhaled a pound of cocaine.
This morning, I went for a run to clear my head. What do you do to clear your head, by the way? You've got something, right? I hope you do. Everybody's got to have something to clear their head. I don't care if it's meditating, or yoga, hitting the gym, taking a walk, doing stuff around the house, painting, whatever. You've got to have something. I'm not a mental health professional, but I'm just saying if you can answer the question, spend a little time and figure out, what is the activity that helps you clear your head? So, I'm running this morning, I'm thinking about the market yesterday and all of the media coverage. By the way, I'm not knocking CNBC for doing a primetime special. I'm not knocking the Washington Post for putting the story on the front page above the fold.
But I realized when I was running the thing that bothers me about all of the attention from days like Monday, all of that media attention, is that it brings all of the non-investors out. You know who I'm talking about -- the people that you work with, your family, your friends, your neighbors, the people who are not investors. They're not interested in stocks. They've decided it's not for them. They don't have the time or the inclination or the stomach to invest in individual stocks. And that's fine. All of that is fine. But when you have a day like Monday, the non-investors start talking about investing because it's in all the headlines. It shows up in their Twitter feed or on Facebook. And then the non-investors start talking to us because we're investors. And they're like, "Wow, rough day in the market, huh? You see that? How's your portfolio doing?" And some of them -- not all of them, but some of them -- they've got that little judgmental edge in their voice, or it's their body language, just that little judgmental tone that's like, "Yeah, that's why I don't invest. It's crazy out there! Stocks'll burn you. I guess my strategy of rolling over 12 month CDs isn't exciting, but I am getting that 2.5% return guaranteed, my friend." I like the non-investors in my life. Hopefully you like the non-investors in your life. I just don't want to hear from them on days like Monday because I'm trying to focus. The non-investors are not helping in those situations.
So, Monday. Let's recognize a couple of things about Monday. First, the financial media is going to do their thing. As Foolish investors, we focus on percentages, not points. Points make a better headline. "767 Point Drop" is a much better, bigger number than the percentages. It's much sexier for the financial media than, "The Dow actually dropped 2.8%." That's like, "Oh, well, when you put it that way, that's not as jarring."
The second thing to recognize is -- and you already know this, but I have to say it anyway -- this is going to happen again. You don't have to be afraid of it. You just have to be aware of it. Yes, it's jarring. It's jarring to people like me, and I've been investing for 25 years. But it's probably more jarring for those of you who have only been investing for a few years. I know that's the case with a lot of you. I get the emails. The questions are great, but it's always more fun to just get a sense of who you are and where you are in your investing journey. For a lot of you, I know, it's early days. You've only been doing this for a few years, and days like Monday are jarring.
Earlier this summer, I went up to Boston to visit my mom, then I drove up to Maine for a night to take care of some family business. The drive is about three and a half hours. I'm sure when a lot of people think about Maine, they think of L.L.Bean or lobster or a lighthouse or the woods. There's a lot of woods in Maine. The further north you go in Maine, the more the wildlife starts to outnumber the people. I grew up in a town called Waterville. When you drive north out of Boston on I-95, you get to New Hampshire, you're in New Hampshire for about 10 miles or so, and then you cross over the border into Maine. And you're just staying on I-95 for about 120 miles until you hit my town. Now, for additional context, you can keep driving another 300 miles before you hit Canada. I'm not from a particularly big place, but you keep driving north, you really get into some small towns, where the deer and the moose play. I don't know that we have antelope in Maine. And yes, of course I've seen moose. I get that question every now and then. "Have you ever seen a moose?" Yeah, sure. It's almost like a rite of passage in Maine. Here's the thing, though. When you're in Maine, you don't need to be way up in the country to see moose. In fact, when I was driving this summer, right after I crossed the border from New Hampshire into Maine there was a big sign on the side of the road that said, "Warning: Moose Crossing," and it had a silhouette of a moose. I was on I-95. I wasn't way up north in the woods. I was on the busiest, widest stretch of the highway in Maine, and already, there's a sign saying, "Watch out for moose." I wasn't afraid. It was a sunny day. I had good visibility. The sign was just a reminder. "Be aware of your surroundings and act accordingly."
That's what Monday was for us as investors. It's a reminder that days like this happen. They will continue to happen. You just have to be aware and act accordingly.
Warning: Moose Crossing. So, seriously, what did you do yesterday after you saw the news? Did you panic? Did you go shopping? I didn't do anything. I just didn't do anything with my portfolio. I know some people who did some shopping. They've got a watch list, they've got a little cash. And they said, "If someone's going to sell shares of that company, that business, that's the same this week as it was last week, someone selling shares and I can buy them for 5% less, I'll buy that."
By the way, I'm not making light of anyone who got rattled yesterday. It's natural. That's not fun. It's not fun to have a day like that. It's natural to have that feeling in the pit of your stomach when every single stock in your portfolio is going down.
Another thing I was thinking about when I was clearing my head this morning was The Godfather Part Two, which is one of the five greatest movies of all time. If you haven't seen it, put it on your list. For those who haven't seen it, the central character in The Godfather movies is Michael Corleone. He's played by Al Pacino. Young Al Pacino. One of the great scenes in The Godfather Part Two is a conversation between Michael Corleone and a man named Hyman Roth. I'm not going to spoil the movie or go deep into the weeds here. But in a nutshell, Michael Corleone is the head of a mafia family. Hyman Roth is a businessman who's older than Michael. He's been around for a long time, involved in various, let's just call them mafia-adjacent business endeavors. So, they're having a conversation and at one point, Hyman Roth is offended by a question that Michael has asked him. He considers the question to have crossed the line. Hyman Roth proceeds to essentially lecture Michael Corleone. He's played by the late great Lee Strasberg, who got an Oscar nomination for playing Hyman Roth. One more reason to watch the movie. But, he takes a moment, and he says to Michael, "You know, when I was growing up in New York, I knew this guy who was younger than me, and we worked together. And as much as anyone, I trusted him. I loved him. And later on in life, he had this crazy idea to build a city in the desert for GIs who were stopping over on their trips to the West Coast. Basically, this guy invented Las Vegas. He was a man of vision and guts. And somebody had him killed, and nobody knows who gave the order. And when I heard the news, I didn't get angry. My friend was headstrong. I know that he rubbed some people the wrong way. So when he turned up dead, I let it go, and I said to myself, 'This is the business we've chosen.' I didn't ask who gave the order because it had nothing to do with business."
That, my friends, is the last thing I think about Monday. And I'm not comparing investing in individual stocks to a lifetime spent running a mafia family. But, self-awareness of our endeavors is both important and instructive. This is the business we've chosen. You and me, we have chosen to invest this way because we know it's the single best way to grow your wealth over time. We choose to invest this way, a Foolish way, because we're not Wall Street traders, we're not investing in businesses for the next three months. We're investing for the next three decades. We're investing together.
So, yeah, days like Monday are not fun. They can feel isolating. But that's the cost of doing business. And ultimately, we're going to be OK with that because we know there are more days when the market goes up. We're in this together. If you need a break, take one. If that means ignoring the news, or not looking at Twitter, or even taking a break from this podcast, that's fine. Do what you need to do to clear your head. When you're ready, come back. We'll be here. The Motley Fool will be here with all of our investing services. Fool.com will be here with articles and analysis 24/7. We'll be here with our podcasts. I will probably most likely be here in this studio because this is the business that I've chosen.
No stocks mentioned today, so I'm going to skip the usual disclaimer. The show is mixed by the amazing Dan Boyd. I'm Chris Hill. Thanks for listening! We'll be back tomorrow!