On Process

Like any other profession, investing is a practice. Minutes pile up into hours, into day, into months and years and eventually, your habits as an investor generally define you. That is why every minute counts. As a professional investor you are preparing for the impossible days during the prosperity. Today is prosperity.

What is difficult is to think about those days when all we have seen for the past few years is butterflies and rainbows. For example, this year alone has seen the least number of +/- 1% moves in the equity markets. This “perfect weather” is the time to hone your skills and be ready to coach clients (and yourself) for the next downturn.

The elite, in any variation, are a group so conditioned that when the impossible day shows up, they do not think-just act. That is the goal, and the only way to achieve that status is to take it one minute at a time. I write here so that I become more prepared when the day comes, so that I have a solid belief system in place when the days of pain arrive. My aim is to not hesitate.

So, in these days of easy money and quiet streets, I think it is important to remember that the markets can do irrational things for long periods of time. I’m not here to say it IS being irrational, but maybe after so long, this greatly hated rally deserves a bit of peace and quiet. Maybe not. Either way, the market will do what the market does-fluctuate. It is our job to make sure not to take excess risk for inadequate return. This tradeoff is what must stay sacred, on good days and bad.