In reply to my suggestion to a client who works in the field that Apple is abetting criminality, he offers this:
If the FBI wants the data on Farook’s phone, they should provide that phone to Apple, and have Apple — under FBI supervision, if need be — access that data with their own tools and provide it as lawfully subpoenaed. The FBI, however, should not be supported by the court to force Apple to provide them with a tool that they can then use in any and all ways they deem fit. As I’m sure you understand, arguments that appeal to “national security” are built on shallow foundations on a very slippery slope.
We are on the same page. However, I would have been less offended had Cook offered as much in his statement.
This will be an interesting and useful public discussion, and one my client suggests we will be having for many years. But for me, this is a workable solution to the current situation. And thankfully, puts some distance between me and Donald Trump.
I am certain a few investors, perhaps you are one, have become uneasy, or worse, after the sharp declines in the world’s stock markets to start 2016. As the media headlines have made more than clear, this large a decline has not happened before at the beginning of a calendar year.
But apart from that anomaly of timing, there is nothing especially unusual happening.
I have no idea what the markets will do in the coming week(s) and frankly I debated whether to write this at all. Then over the weekend, I read the excellent piece below by Ron Lieber, the Your Money columnist for the NY Times. Sometimes it is helpful to reiterate what should be an investor’s basic mantra, in good markets and bad. I could not sum this up any better than does Lieber.
6 Tips for Investors When the Stock Market Tumbles
- You Are Not the Stock Market
Chances are, your portfolio is a diverse mix of investments. While stocks may be falling, you probably also have some bonds and cash. Perhaps there are some real estate mutual funds, too. Then there’s your home equity if you own a home, not to mention the value of your future earnings. These things probably won’t all fall simultaneously.
- You May Have Done Quite Well in Stocks
If you were in stocks from 2009 to 2015, or in the 1990s or consistently since the early 1980s, you are most likely a big winner. It’s generally a bad idea to look at your investment statements too often, but take a quick peek at your long-term performance. That outsize gain you see is one reason you were in stocks in the first place.
Plenty of research shows that if you miss just a few days of the market’s biggest gains, your long-term portfolio will suffer badly. If you decide to put a lot of your money in cash right now, how will you know when to get back in the market? You’ll probably be looking for a sign, and that sign will be the rebound days on which you missed out.
- Your Goals Probably Have Not Changed
At some time in the past, when you were not scared, you made a decision to construct your portfolio a certain way. You knew that stocks involved risk and that the returns they have traditionally delivered, above and beyond what cash and bonds do, was the reward for your persistence.
Nothing about recent market events suggests that the fundamentals of capitalism have changed. So neither should your confidence in very long-term ownership of the pieces of the for-profit enterprises that benefit from your fortitude.
- Most Investors Have Plenty of Time to Recover
Too many 70-year-olds sold all of their stocks in 2009 and are healthy enough to live to 100. They would be going on a lot more vacations now and be worrying less about long-term care if they had held firm.
Worried about a 529 college savings plan for a 12-year-old? Let’s hope you weren’t 100 percent in stocks with six years to go before needing money for tuition. Still, you have at least nine years for a portion of that portfolio to recover from any sustained downturn.
- Some People Cannot Handle the Stress of Stock Investing
Maybe you are one of them. But try to give this more time, and consider the alternatives. There are few investments that can deliver the kinds of returns that stocks can without their own accompanying anxiety. An alternative is to save a lot more in safer investments like cash or certain bonds. Most people don’t have enough income to do that easily, so settling for lower returns will mean a combination of working longer and living modestly. For some people, that is a fine trade-off.
- Dear New Investors: This Is Just What Markets Do
There is absolutely nothing abnormal about what is going on here. Most of us have to save somewhere, and history suggests that stocks are the most accessible route to getting the returns you will need to retire someday. It would take decades of systemic economic erosion to prove otherwise, and a few days of market declines do not suggest that anything like that is upon us.
The film of Michael Lewis’ book of the same name brings to the screen one of the best overviews of how people really behave on Wall Street since Margin Call. The interplay in particular between the hedgies and their bank risk manager in the new film is spot on. And what to say about Christian Bale’s bravura performance?
The Big Short does not dumb down the mind-numbing complexities of the CDOs and CDS’ that were central to the financial crisis, apart from several way too cutesy little cameo inserts that I suppose on final cut must have seemed necessary. It may be too “inside baseball” for the average viewer but The Big Short is highly recommended to anyone with an interest in the investment markets or the housing crisis.