Dear Graduating Class of 2020

Although it may be the most difficult time to be a high school or college graduate EVER, those kids still expect some words of wisdom, as in past years.  Let's get to it.....

To the hard-luck graduates of 2020:

This must really suck.

It’s hard to imagine how it could be worse than ‘right now’ for a high school or college graduate, during the COVID-19 pandemic.  Not being able to make memories from that last month or so in school?  Not being able to enjoy all of the traditions and hijinks of those final days of classes?  Not being involved in all of the pomp and circumstance of graduation week?   Not being able to have all that attention from friends and relatives at graduation ceremonies and parties, nor collecting the graduation presents?

This must really suck bad.

And there’s no getting it back, either.  Oh sure, you might eventually have a ceremony of some sort.  And you’ll probably get those graduation gifts down the road.  But all of the fun – that’s just gone, and there’s nothing you can do about it.

This must really, really suck bad.

To make matters worse (especially if you’re a college graduate), you’re entering in to the worst job market of the past 90 years.  Frankly, unless you have mad skills at developing pharmaceuticals for treating or curing viruses, there isn’t much out there for you right now – unless your life’s goal is to work in an on-line shopping fulfillment warehouse, a fast food restaurant, or a slaughterhouse.

This s-u-u-u-u-u-u-u-u-u-u-c-k-s.

Can anything be salvaged from this incredible misfortune to make you feel better?  Sure, there are lots of things that might perk you up.  For example, since you’ll either be unemployed or taking online college classes or both, your parents are a lot more likely to let you save money by living with them rent free.  (Actually, I could only think of that one thing, and it has as many downsides as upsides.)

Let’s face it, Class of 2020 – you’ve drawn the short straw.  Civilization, with an assist from national governments, has failed you.  You only have one option:  Determination.

Put your mind to it, and you’re going to get through this, along with the knowledge that you can succeed even when starting from one of the lowest points in United States history.  That’s a great rallying point, assuming you don’t use it to start a second Civil War, and further assuming we still have a functioning society.

Years from now, you aren’t going to be that upset about the events that didn’t occur, but you might be upset that you didn’t use the events that did occur as a springboard for what might have been.

Berky Meeting Nuggets 2020 -- Pandemic Edition

For the first time since the COVID-19 pandemic got real in the U.S., an event I really wanted to attend was ruined.  It was the Berkshire Hathaway annual meeting in Omaha, which only offered online streaming of this year's meeting.

You can count on the fingers of one hand the number of times in the past 20+ years I haven't personally attended 'Woodstock for Capitalists.'  It's more festival than meeting, taking up an entire arena and adjoining convention center, although the centerpiece is always Warren Buffett and Charlie Munger sitting on a stark stage answering questions and making comments for about six hours.

I watched the entire stream, which this year consisted of Buffett and heir-apparent Greg Able talking on that same stage for almost five hours.  (How does the 89-year-old Buffett do this, or anyone for that matter, without taking a break?)  It wasn't the same, of course, but they tried.

The main thing missing was Vice-Chair Charlie Munger, who didn't participate at all this year.  The highlight of most Berky meetings is listening to Munger's acerbic wit as he answers questions, usually ones for which Buffett probably said the same thing in a more extended, eloquent way.

I don't really have any specific nuggets this year.  Every question, answer, and comment was pandemic-related in one way or another.  Buffett was optimistic on America's long-term future, having already survived a civil war and a years-long economic depression.  However, he didn't sound very optimistic about the next year.

He was probably just bummed that he couldn't have the usual fun annual shareholders meeting this year, and given his age, their aren't many left for him to lead.

And clearly, we both missed Charlie.

All Fo(u)r Twenty

Today is 4/20, making it a perfect time to again comment on the movement to decriminalize and expand the availability of cannabis in America.  You know, marijuana, the drug that is safer than alcohol but treated like cocaine.

We're up to ten states now that have legalized marijuana in some non-medical way.  Ten now, but what will it take to get to twenty and beyond?

Unfortunately, while the polls continue to show an increasing majority of Americans support marijuana legalization, the federal government and most states still don't allow it.  They don't even allow medical marijuana usage, which has an even larger majority of American support.

So, what gives?  Let's just use my home (red) state of Iowa as an example.  It has a Republican governor and legislature, so even though legalization is popular overall, it isn't so popular inside their conservative constituencies.  The Rs basically have a bend-but-don't-break attitude, where they act like they're doing something without actually doing anything.

For example, Iowa does some medical cannabis usage through a few approved dispensaries, but prescriptions can only be filled with minimal amounts of THC.  It's so little, in fact, Iowa isn't even considered a medical marijuana state.  This in spite of calls by doctors and pharmacists to increase the maximum THC dosage.

This is the worst, dumbest way to do things, because lots of effort produces zero positive results.  People / patients aren't getting better, and the state gets no tax revenue.  The fact that a neighboring state (Illinois) this year legalized cannabis just makes it even worse / dumber, since motivated Iowans simply drive across the border.  The result is, the people get what they want, but another state benefits from the commerce.

In the end, Iowa and other non-cannabis states would be better off financially just not allowing any marijuana usage, rather than limiting it the way they are.  Of course, if they legalized it, those states would see a multi-million dollar tax revenue bonanza -- but since the Rs don't want to look so bad politically, they do things one drip at a time, showcasing the insanity of their ways

One small irony in all of this is that Iowa does consider its dispensaries to be essential businesses, so they remain open during the COVID-19 pandemic.  Wouldn't it be nice if there was an effective, natural drug that could help everyone through the pandemic, not only physically but mentally?  And regulated selling of that same drug could create millions in tax revenue being lost by the state due to the same pandemic?

Maybe by next 4/20.

Compliance Versus Defiance

In the midst of the enormous health crisis that is the coronavirus pandemic, it’s sad there is so much political fire being exchanged.  It’s actually necessary due to the disgraceful way the executive branch has denied the pandemic and mismanaged the response, but it’s still sad.

Not to pile on the sadness, but at the 30,000 foot level, there is a least one new political truth that has been brought into sharp focus.  That is, that Democrats have become the party of compliance, while Republicans have become the party of defiance.

It hasn’t been like this since, well, ever.  Democrats are supposed to be the liberal ones, fighting against the status quo.  Does anybody around here remember the battles (both real and figurative) of the 1960s and 1970s, not to mention the progressive, Medicare-for-all movements of the now?  And Republicans have always been the party of don’t-change conservatism, supposedly more obedient to the law.

The pandemic changed that.  When it came time to follow the advice of the medical experts, to take precautions, to stay home, to avoid people…..it was Democrats who were quick to comply.  Meanwhile, led by the misinformation of their chief executive and conservative media, the Republicans were slow to act.  They thought they were smarter than the experts, who weren’t going to tell them what to do.

Only three or so weeks into this thing, we know compliance saves lives, while defiance costs lives.  While it’s been awful to have watched this happening in real time, there may be one very small consolation – defiance is more likely to thin the herd of the defiant ones, at least for the future.

A Tale Of Two Viruses

As I write this, we are in the midst of a global pandemic, brought about by a novel virus with no existing vaccine or treatment.  This virus sickens virtually everyone who comes into contact with it.  It does not care about race, religion, gender, sexual orientation, financial class, political affiliation, or nationality.  It is not a hoax.  All of this has led to an economic meltdown of historic proportions, as worldwide people are asked to abide the directives of governments that cannot be trusted to provide proper information or materials.

Also as I write this, we are in the midst of a domestic crisis, brought about by a narcissistic virus with no existing vaccine or treatment.  This virus sickens virtually everyone who comes into contact with it.  It only cares if you are white, Christian, male, straight, upper class, Republican, and American.  It is a total hoax.  All of this has led to a political meltdown of historic proportions, as American citizens are asked to abide the directives of a government that cannot be trusted to provide proper information or materials.

The virus I refer to in the first paragraph is COVID-19.  The virus I refer to in the second paragraph is Donald Trump.

Let's hope one of these viruses overcomes the other as soon as possible.

Opposite Day(s)

The coronavirus is spreading across the continents.  The stock market and interest rates are tanking.  This is a good time for some perspective (on the markets, not on the virus).....

When stocks decline sharply, the steady flow of negative news reports drives many people to flee the markets out of fear -- and miss out on potential gains as financial markets inevitably regain their strength over the next few months and years.

Right now, we're actually going through the third(!) stock market drop of 10% or more in the past 13 months.  The other times, as well as all of the other times before that, the markets recovered and went on to new highs.  Yet people are still fearful.

So how do you keep the fear from prevailing?

Simple.  Long-term investors should do the opposite of what they want to do.  That is, instead of watching the markets and reacting, they should ignore the markets and do nothing.

It's OK to not check your investment / 401k / 403b account balance when the market is falling.  It’s also OK to not watch or listen to financial news.  In fact, turning off the financial news is the smartest anyone can do if it keeps them from making mistakes based on emotional decisions.

The real contrarians will actually do something -- they'll buy into the falling markets, and of course, sell into the gaining ones.  They're the smart ones.

Be smart.  Be brave.  Be opposite.

Caucus Of Death

Disaster.  Debacle.  Embarrassment.  Fiasco.

You may think I'm talking about the current presidential administration.  While those words definitely all fit that, I'm actually referring to another political item:  The 2020 Iowa Caucuses.

This isn't going to be a review of what went wrong. [Technology.]  Nor will it be a prediction about the future of Iowa's first-in-the-nation presidential election year event.  [Terminal.]  It's to clarify something the national media doesn't cover:

Most Iowans do not give a damn about preserving their first-in-the-nation caucus status.

The only folks who really ever cared were / are mainly political activists and wonks, who constitute a very small percentage of the population.  I'll also throw in the hotel and restaurant industry and a few other small main street businesses, which enjoyed higher sales from all of the extra people roaming the state off and on for months.

Yay for the economic growth of a few, on a quadrennial basis.

So for anyone who thinks Iowans will be universally sad to see the caucuses abandoned, no worries!  We're actually looking forward to having fewer political commercials bombard us on both traditional and digital media platforms.  We're looking forward to having more elbow room at the Iowa State Fair.  We're looking forward to the calm.

The Iowa caucuses have always been a slightly goofy anachronism in the privacy-challenged digital age.  It may well be time for them to die.

In which case, not that many Iowans will be crying at the funeral.