Top Investors on Market Direction and What To Do [COVID-19 Edition]

There is an endless debate about the future direction of markets, but the discussion seems more important now and people tend to grasp at any available information when uncertainty is perceived to be high. As always, both the optimists and pessimists have good arguments supported by endless amounts of data, solid logic, and historical analogs. Who should investors listen to and what should investors do?

Fortunately, some of the world’s best investors have chimed in on the topic over the past few weeks.

I don’t have the faintest idea whether the stock market is going to go lower than the old lows or whether it’s not.”

-Charlie Munger, WSJ, 4/17/2020

The future for all these things is clearly unknowable. We have no reason to think we know how they’ll operate in the period ahead, how they’ll interact with each other, and what the consequences will be for everything else.  In short, it’s my view that if you’re experiencing something that has never been seen before, you simply can’t say you know how it’ll turn out.

-Howard Marks, Memo: Knowledge of the Future, 4/14/2020

I don’t think I can make money by predicting what’s going to go on next week or next month,” he said. “I do think I can make money by predicting what will go on in the next 10 years.”

-Warren Buffett, CNBC, 2/24/2020

First of all … an investor must understand that they probably will not be able to play the game well. They probably will not be able to decide how to move in and out of things. In order to be successful in the markets, it is more difficult than getting a gold medal in the Olympics. You wouldn’t think about competing in the Olympics, but everybody thinks they can compete in the markets.”

-Ray Dalio, TED Connects, 4/8/2020

As usual, the consensus among the top investors today is:

  • We don’t know where the market is headed.
  • Deciding whether to be in or out of the market right now is unlikely to be profitable.

Turbulent times create some of the best opportunities, so investment decisions need to be made and executed well. However, predicting the direction of markets should not be a priority and you’re doing it wrong if it is.

Flower Time!

The floral industry is one of the hardest-hit industries in this pandemic. Without weddings, funerals, parties, corporate events, or retail foot traffic, the demand for flowers has collapsed. And it could not have happened at a worse time for this seasonal industry with Mothers Day, wedding season, conference season, and so on yet to come. Consequently (and as this recent Bloomberg article summarizes and illustrates with stunning images), large parts of the floral supply chain have been decimated.

Retail florists, event planners, distributors, wholesalers, and growers have largely been forced to shutdown under shelter-in-place orders and/or the evaporation of demand for flowers. Untold numbers of people have been furloughed or laid-off around the world. This hits close to home; my family’s flower business has been operating for over 100 years, but was recently forced to temporarily close and let go of dozens of employees. Although San Francisco recently allowed a limited re-opening of the SF Flower Mart this past week, the future remains very uncertain.

Below are some ways that we consumers can help support the floral community in this time:

  • Order flowers from a local florist, by calling them directly. Order from one you know or use a service like yelp to find one.
  • Don’t order from an online or “wire” services, which are essentially delivery services. Florists often make little or no money from these orders and so the quality of flowers and design is likely to be lower; many florists don’t even put their names on these arrangements.
  • Pre-order flowers for Mothers Day. Flowers are perishable items and no florist will carry any inventory beyond what they know that they can sell (in this economic environment).
  • Buy flowers for family and friends as gift, since you cannot see them in person.
  • Buy flowers for your home. Flowers are an easy and inexpensive way to brighten a home, improve mental health, or surprise your spouse.

We’re all in this together, so spread some joy with flowers!