When you speak with long term equity holders, who have started...

When you speak with long term equity holders, who have started getting concern about the recent falls, they tell me we cannot really tell how the markets would do ahead, indirectly taking solace that every each time equity markets eventually recover from their losses after the crisis or any crisis. And they are not wrong.

Yet every caveat in funds footnote would say that past performance is not a predictor of future performance. We also hear a lot about Is This Tine Different, only referring to equities being able to do what it had not been able to do in the past, so the inclination to believe that the bull market can continue indefinitely despite everything thrown upon it, and the more defiant the markets are to adversity and challenges, the more embolden LT stock holders get that their Time in Market strategy has no holes.

BUT This Time is Different could also define a catastrophic market outcome that we would never want to even imagine to be plausible and which can be unthinkable. Because we have the highest debt levels ever in the highest valuation period in the most unstable geopolitical era - This Time is Different because of the confluence of these factors that could decimate economy and markets for years to come. I say Could not Would ; and I said Unthinkable because we can only understand it once it happens. Did anyone even understand what Yen carry trade is all about and why it imploded? That is what I mean- there are many of these Risk factors that have yet to be brought to surface but gradually manifesting beneath.

A time could come with LT holders could be BLINDSIDED by the very belief that held true for decades. Like the Pavlovian dogs who have been mentally trained to think that every time a whistle is blown, there must be food. Market participants would look to buy the dip (BTD) every time the market falls, thinking the opportunity is there.

Market participants respect a price rise but they don’t respect a price fall, yet in both ways, market movements tell us an underlying story why we should be hopeful/ optimistic or cautious/pessimistic. The market isn’t stupid while we are clever, maybe for a short period. That thinking led many to buy falling knives even before adverse events have yet to unfold or fully unfold.

Capital Preservation at this point is critical, more important than opportunity to gain, and Vern Gowdie’s mantra of WINNING IS NOT LOSING is the wisdom we should adhere to.