What I Learned At My "50th Birthday Party"... Can You Believe They Let Us Run Companies?

Last weekend, I attended an unofficial high school class reunion. Thirty-one of us got together in Lexington, KY, and threw ourselves a birthday party, though frankly I do not remember a single occasion of anyone mentioning a birthday. It was a chance to steal two days from the rest of our lives and spend time with old friends and classmates. Without giving too much away, it was a big birthday, though I would like to point out I am extremely young for my grade.

Amid all the silly stories, remembrances, and tall tales, there was also just a slight tinge of, not sadness, but of acknowledgement of our age. I mean, we’re getting kind of old!  There is no one our age playing in any major league sport in America. In fact, quite a few coaches are substantially younger. We’re the older, serious people now—the people in charge—though one of the best comments of the weekend was, “can you believe they let us run companies?” 

That remark stemmed from the types of conversations people have who only see each other every five or ten years. There was an immediate reversion to freshman or sophomore year of high school. With predictable subject matter. 

So, one observation about this reversion to adolescence is that you realize that people really haven’t changed one iota in decades. I mean, all kinds of things happen to people—they can lose their hair, get married, put on weight, move to Colorado, strike it rich, take up carpentry, you name it, but there was no one in attendance whose life was so radically different from what you might have predicted when they were playing junior varsity lacrosse. People don’t tend to change a lot. Changes happen, but only gradually, in the fullness of time. 

I wrote a few months ago about one of my classmates who had become an admiral in the US Navy (of course, he could not attend last weekend’s frivolity but we did FaceTime him—I can only imagine how amused he was). His gradual life choices had compounded into something beautiful and rare; really, they all do; just some are more productive than others, I suppose. 

We’re only human, after all. We make terrible mistakes all the time. We think we’re following logic but many times we’re not, just instinct. That’s why investing and planning is so difficult despite being relatively straightforward. To be successful, you often have to do the exact opposite of what you want to do. The more you can take your human frailty out of your process, the better off you are. 

Quick Market Update

Markets were stronger than I anticipated this month (frail human, Exhibit A). According to Bloomberg, the Dow climbed 0.6 percent, while the S&P 500 was up 2.2 percent (reached all-time highs!) and the tech-heavier NASDAQ finished up 3.7 percent.  While tariff fears are still weighing on the economy, which grew 1.9 percent during the third quarter, which was still a little better than expected. Corporate earnings declined year over year, and for the third straight quarter, but the results were not quite as bad as feared. A full 75 percent of the companies reporting so far have exceeded expectations, which is slightly better than average, according to The Wall Street Journal. 

Markets are a little manic, but that’s normal. The trade war still looms, and Brexit, and talk of impeachment, but the market does what it tends to do. It climbs the wall of worry. I want to put more cash to work in a pullback. As someone who tries to look a year ahead, it’s hard to make the case that we won’t be in a particularly volatile market next fall during the election, but I hope to find some bargains in the meantime. 

Talk next month, or maybe at the next reunion. 

Any opinions are those of Burke Koonce and not necessarily those of RJA or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of The Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.

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