Transcript

Well, this has been a very tumultuous week, and this is our market alert video for the week ended Friday the 13th of March, and this is supposed to be a weekly video that we produce, but I think we’re going to rename it the tri-weekly video that we produce after what’s been going on. So, it’s been a very eventful week. As you know, we sold our equity positions on Tuesday, and over the next few days the market went down over 3,000, almost 4,000 points. On Friday, we had an up day and the President announced that it is a national emergency.

So, let’s go over what happened this week. There was a panic of course. The market had a huge sell off, and then the central bank in Germany said that they’re going to bring as much money as it takes to bear, and our central bank said that $1.5 trillion is now in liquidity is going to be available. So, they’re trying to calm people down as to money being available. President Trump announcing that this is a national emergency now opens the floodgates for all the government agencies to act in concert to bring to bear all they can to control the coronavirus, and so with all of that — the market responded favorably to that on Friday.

Now, it is human nature that on a day when the market is up we’re thinking, “Oh my gosh, why did we sell?” And on a day when it’s down we’re thinking, “Oh great, I’m so glad we are out.” Okay, so each day you’re going to feel a different emotion. I want to put things in perspective for you. If you read in my book the chapter on the biggest up days and the biggest down days in history — and by the way some 2020 days have been added to the 20 top days now on that list — but what you’ll find is that prior to now every one of those (except for one) of the top 20 biggest up days and biggest down days occurred during the great depression, occurred during the 1973-74 when we had the terrible inflation and the horrible recession in the United States. They happened in Y2K and they happened in 2008. So, if history holds, the fact that we are having these massive up days, these massive down days — what it means is that we may already be in a terrible recession, and we don’t know it.

So, our view is that yes, having liquidity and lowered interest rates is a plus to help to recover or buffet the economy. Yes, the fact that the President has announced that it’s a national emergency is a good thing because now the entire government can act in concert to attack this problem. But, really what the markets care about is not whether the Fed lowered interest rates or whether the government is going to act on this. What they care about is how people behave. So, as long as people are fearful, they are not going to go to restaurants, they’re not going to go to shopping malls, they’re not going to fly on airplanes and employees are not going to want to go to work in factories. And if that continues for a long time, if for several months people are so scared that they don’t do that, then we could have a significant recession and businesses could go under, and if that happens then we could see a terrible bear market. So, you know, for example, I don’t think that somebody who heard the Fed just lowered interest rates is going to say, “Oh good, I’m going to go to a crowded place.” You know, I think people are going to respond to the fear they have inside, and until that abates, we don’t see the market turning around.

So, having said all that, our decision to get out we think is still the prudent move. Time will tell where it goes from here, but we don’t think this is over as of yet, and so we want to remain in a safe place away from further damage done to our investments and our retirement plans.

So, we thank you for letting us worry about all of this for you. We hope you are not [worrying], right? We have two goals for you. The first is we want your money to last as long as you do and taking you out of harm’s way is one way that we feel can do that. And secondly, we hope that you have financial peace of mind. And so, we hope that we’re giving you that, and the fact that our investment committee has been meeting almost daily now to strategize and to talk about different scenarios and what we would do in the event of those scenarios. So, we’re looking at all kinds of things. We’re worrying about it so that you don’t have to. Okay? So, we hope that you have the peace of mind and that you are staying safe and that you are healthy, and we look forward to many more years of helping you make these decisions on your finances.

Now, we encourage you to share this video with friends and family and associates that you would like to be also aware of what we are doing and that you are concerned that they might be exposed to the risk of this market going down dramatically. And if you share with them, hopefully they will follow our advice or maybe even come in and visit with us and have us do it for them. Either way, we hope we can help as many people as we possibly can to have a secure financial situation. So again, we are thankful for you, we are internally grateful that you let us do this for you and we will talk soon.