A Zebra in Lion Country
Little captures the American spirit better than Nike’s “Just Do
It” slogan. Americans like to be positive and to take action. They are not good
at being patient. Many investors aren’t patient when the news is horrible
and there seems to be no hope. The debate over the U.S. budget deficit has
shaken confidence around the world. But we know from experience that the
economy goes up and down. We have good times for years with plentiful jobs and
markets surge. Then everything falls apart and there is no light at the end of
the tunnel. Over the last century recessions have generally lasted less
than a year and often are followed by a steep market recovery. Trying to time
that surge is a losing battle. In the book “A Zebra in Lion Country,” Ralph
Wanger describes trading frenetically during the stock market crash of 1987.
At the end of the week he stepped back and found that he’d accomplished
nothing. Pushing the panic button may bring relief but it’s no substitute for
careful thought and a well designed portfolio. “Just Sit There” sounds
terrible but it’s saved many investors and eventually the turbulence will pass.