If you consume enough news, you’ll eventually come across a common refrain: “some worry”. Innocuous enough, right? It’s not “all worry”. It’s not even “most worry”. It’s “some worry”. Oh, the indeterminate “some”.
While seemingly inoffensive, “some worry”s are enough to subtly plant the seeds of doubt. Nestled between a headline and the corresponding worst possible thing that could be inferred from that headline, “some worry”s neglect to share how likely their corresponding assertion is to occur. The possibility of impending doom is all that matters. In order to drive that home, there’s usually an ancillary anecdote about what one “some” is doing as a result.”Don’t take my word for it, here’s a ‘some’ who agrees!”.
The implication being that if “some worry” about that possibility, then perhaps more should also worry. So if we’re not super worried, should we be worrying? Are “some” smarter than us? If “some” are doing something, should we be doing something? Before we know it, we’re inhaling the secondhand worry, absorbing the negativity via osmosis.
“Some worry”s manifest into investment mistakes. Unfortunately, they’re incredibly persuasive due to a truth Morgan Housel shared: “Optimism often sounds like a sales pitch, while pessimism sounds like someone trying to help you”.
Upon being imbued with the “some worry” pessimism, our crucial context and situational awareness vanishes, replaced by the stresses of the “some”s. When we forget what game we’re playing, errors become easy.
“Some worry”s are clearly an effective way to capture attention. But what if we could harness them to help, rather than hurt, the long term investor?
Here are a few attempts to do just that:
- The Dow Jones Industrial Average fell by 600 points. Some worry that focusing on points rather than percentages is giving others a false impression of how dramatic the move actually was. “600 points is a little less than 2% these days”, said long term investor, John Smith, “that’s not such a big deal”.
- The US economy contracted 0.9% in the second quarter, which marks two straight negative GDP prints. Some worry that the stock market may have already priced in this economic downturn, and, as a result, others may have overreacted by taking their well diversified, low-cost portfolio to cash. “Going to cash when I’m investing for the next two to three decades? Couldn’t be me”, shared Jane Doe.
- So-and-so from XYZ investment bank says they’ve been raising cash in client portfolios. Some worry that such commentary will lead others to conflate the objectives of professional traders with their own reasons for investing. “Their clients judge them on a monthly or quarterly basis. Thank god I don’t have to pay attention to such short-term results”, posited Bob Jones, whose investment portfolio remains completely intact.
- The bond market has had a historically bad 2022, as a result of ongoing inflation and the Federal Reserve raising its benchmark interest rate. Some worry that the year-to-date losses might distract others from seizing the opportunity to buy higher yielding bonds that now have better expected returns. “The best predictor of bond returns is their current yield. As somebody who plans to hold bonds for the next few decades, I’m glad to see yields up”, explained Sue Davis, local retiree.
- The S&P 500 is going on seven months since its last all-time high. Some worry that it’ll rage back to all-time highs too fast for others to continue averaging into stocks while they’re on sale. “I’m buying stocks in my 401k every two weeks via payroll. I hope prices stay low for a while so I can buy more shares at a discount”, exclaimed George Brown.
As Michael Batnick once wrote, “Skeptics sound smart. Optimists make money. Doom and gloomers will look like soothsayers from time to time, but I don’t know anybody who got rich fading the human spirit. Don’t short capitalism.”
Unfortunately, optimism always tends to be in short-supply. We need more “some worry”s focused on decades, not days.
**Shout to Eric Balchunas of Bloomberg whose excellent book, The Bogle Effect, has a chapter titled, “Some Worry”, that inspired this post.**