So Much Energy Wasted, So Many Portfolios Neglected

One of Peter Lynch’s “25 Golden Rules” said to “avoid weekend thinking and ignore the latest dire predictions of the newscasters.” (You can catch up on the “25 Golden Rules” here and here.)

To understand this further, we continue our dive into his book, Beating the Street.

He says,

When we make the mistake of letting the news out of the bag, we are confronted with the latest reasons that mankind is doomed: global warming, global cooling, the evil Soviet empire, the collapse of the evil Soviet empire, recession, inflation, illiteracy, the high cost of health care, fundamentalist Muslims, the budget deficit, the brain drain, tribal warfare, organized crime, disorganized crime, sex scandals, money scandals, sex and money scandals. Even the sports pages make you sick.

While catching up on the news is merely depressing to the citizen who has no stocks, it is a dangerous habit for the investor. Who wants to own shares in the Gap if the AIDS virus is going to kill half the consumers, and the hole in the ozone the other half, either before or after the rain forest disappears and turns the Western Hemisphere into the new Gobi Desert, an event that will likely be preceded, if not followed, by the collapse of the remaining savings and loans, the cities, and the suburbs?

You may never admit to yourself, “I decided to sell my Gap shares because I read an article in the Sunday magazine about the effects of global warming,” but that’s the kind of weekend logic that’s in force, sub rosa, when the sell orders come pouring in on Mondays. It’s no accident that Mondays historically are the biggest down days in stocks and that Decembers are often losing months, when the annual tax-loss selling is combined with an extended holiday during which millions of people have extra time to consider the fate of the world… A successful investor does not let weekend worrying dictate his or her strategy.

He wrote this book in 1993. As you can see, not much has changed.

Global warming is still in the news. Instead of the evil Soviet empire, now it’s the evil Russian Federation who is spying, buying Facebook media and hacking our elections.

Terror is still in the news. Along with everything else he mentioned.

Our weekly intel brief starts with the quote:

What has been, that will be; what has been done, that will be done. Nothing is new under the sun!

– Ecclesiastes 1:9

Everyone thinks what’s happening today is new. That things like this have never happened before.

So much energy wasted. So many portfolios neglected.

Things change. Plots change. Characters change. But human nature remains the same.

By reading the wisdom of Peter Lynch, we know that “a successful investor does not let the weekend worrying dictate his or her strategy.”

Weekend news. Weekday news. It doesn’t matter.

The 24-hour news cycle is the investor’s enemy.

Nothing is new under the sun since 1993.

Meanwhile, headlines grip the average investor with doom and gloom.

But businesses keep producing new products and services. The world keeps moving forward. The stock market keeps chugging along.

Here’s a look at a chart of the S&P 500 since 1993…

The S&P 500 is up 525% since 1993. This timeframe includes the dot-com bust and the world’s biggest financial crisis since The Great Depression too.

In short, it pays to ignore the “latest dire predictions of the newscasters.” Your investing success depends on it.