Not only do I look forward to May each year for the Berkshire Hathaway (BRK-A) annual meeting, but the month is much more than that too. Yes, it is the beginning of spring, and yes, the tulips are blooming, but more importantly than that, across the country thousands of students are graduating. Maybe it is all the pomp and circumstance, maybe it is all the speeches, maybe it’s the buzz that fills most schools and campuses, but whichever way it grips you, it makes this particular time of year not like any other.
The reason for this, of course, is that even though graduation is the end of an important chapter in many folks’ lives, it also offers the opportunity to start something new. For some it may symbolize an unblemished canvas that they can begin painting in any manner they see fit. Or for others, it may appear to be a road with unending opportunity. And while this privilege of starting anew is typically reserved for graduates each May, whether they be from college, high school, vocational school, or heck, even pre-school, I’d argue that in 2009, many more folks can, in fact, start thinking like graduates again.
You see, what’s happened over the past year in the economy, the investment world, politics, government, and I’d argue pretty much anything else, has caused such an upheaval, and has shell shocked so many people, that almost everyone has now been forced to reset their path to some extent, and probably more poignantly, reexamine their expectations.
And I realize that for many, this hasn’t been a pleasant experience. Businesses have lost customers. As a result, employees have lost jobs. Others have lost savings and retirement. Some have even lost their homes. And the most natural feeling to have when any of these events—or even others that I didn’t mention—occurs is to feel frightened, and to hearken back to the feeling of an easier and more comfortable time. That, in my opinion, is human nature.
What this fails to take account of, though, is that when practically everyone is forced to reset, it also has the effect of creating huge amounts of opportunity for those able to recognize it. Folks who had been unable to make changes, or breakout into something new, because the status quo was so accepted (rightly or wrongly), may now have the opportunity to freely paint their proverbial masterpiece, however they see fit.
For the great majority of people, this means that someone who has lost their job can now think about doing something else that they’ve always wanted to do, but never felt that the timing was right. Or maybe others can retrain themselves to do something that they are more passionate about pursuing. Or even others, can think about starting a business to try and capture some of the customers that existing firms inadvertently jettisoned as they retrenched. All of these are enormous opportunities that often only come around once or twice in a lifetime—if you are lucky.
What got me thinking about all this as an investor were comments made by Berkshire Hathaway Vice-Chairman Charlie Munger in Omaha a few weekends ago. Munger said, and I’m definitely paraphrasing here, that even though the current turmoil is nothing like the 1973-74 retrenchment in the economy and the markets, he knew then that it (73-74) was his time, his only time. He went on to say that unfortunately he had practically no money at that time, which, in fact, is why those times occur. Munger then provided some advice for the audience by saying, “If I were you, I wouldn’t wait for 1973 and 1974. Anytime we get an opportunity to do something that makes sense, we do that.”
And for most folks, be it in their careers, life, or investments, this might, in fact, be their time to do something that in, Munger’s words, “makes sense” for them. As an investor, maybe this means re-examining one’s financial position, and not reacting out of fear, or doing things now that they should have done two years ago to deal with today’s reality, but instead looking at their current opportunity set, and doing something that makes an enormous amount of sense for them right now.
While it seems so simple, what it also requires, in my opinion, is the emotional temperament to confidently think differently. It requires the ability to tune out all the naysayers, or the people trying to sell you product, or those trying to make you afraid of something--which, ironically, is often the same people trying to sell you things--and really start thinking again like a graduate, where the slate is clean and the possibilities are abundant. And even better, this might be the time—the only time—where one can match all these possibilities with their accumulated experience and knowledge, to, in effect, seize their day. After all, Munger’s not such a bad example to follow, as he seized his and became enormously successful.
It is my hope that you—as well as all of today’s graduates--will be too.
I welcome dialogue with my readers, so please send me any questions and comments you have. Also, if you haven’t already done so, please be sure to sign-up for my free email alerts emailing me at bufffettinsights@gmail.com.
Justin
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The content contained in this blog represents the opinions of Mr. Fuller. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business. This content is intended solely for the entertainment of the reader, and the author
