This crisis is bringing out the best in many people. When the stakes become real, alertness is heightened, thinking is crystallized. Here is an eclectic collection of thought pieces we’ve enjoyed over the past two weeks.
Bin There Done That by Morgan Stanley
Ample research shows that most experts do not make great forecasts.
“BIN Model,” where “B” refers to bias, “I” to information, and “N” to noise.
When it rains by Daniel Crosby at Brinker Capital
The RAIN model is a simple, four-step process for managing periods of acute stress.
Tactical Asset Allocation in a Bear Market by ReSolve
Surfing markets is by no means a linear endeavor; it is a choppy process with many ups and downs before catching the next prospective wave.
Managing survival instincts during market volatility by Russell Investments
Will the negative impacts of the coronavirus reduce the future earnings potential of the average stock in the S&P500 by 30%? Easy to ask. More difficult to answer. We think the answer is no.
Our return prediction now forecasts a 10-year return of 5%/year for U.S. stocks. That is up massively from the 1%/year prediction as of the end of 2019.
A BMO COVID-19 Update With Chief Medical Officer of WebMD
Good News: Big Commercial testing rolling out. Over 2000 labs - 1.9 million tests expected.
Evidence over hysteria — COVID-19 by Aaron Ginn
I hope you walk away with a more informed perspective on how you can help and fight back against the hysteria that is driving our country into a dark place.
Great site to track all the facts and most up-to-date data on COVID-19
The Panic of 2020? Oh, I Made a Ton of Money—and So Did You by Jason Zweig
Hindsight bias suggests that one day you’ll look back on all of this and... lie
What Benjamin Graham Would Tell You to Do Now: Look in the Mirror by Jason Zweig
Forget about what the stock market is going to do. Instead, focus on what you, as an investor, ought to do.
Warren Buffett Interview part 1 and part 2
Human progress will not end. Know your circle of competence.
We Continue to View Large Cap Stocks Favorably by Applied Finance
Panic selling and missing the upside returns as markets return to normal set back wealth accumulation by years if not an entire decade.
Reinvesting when Terrified by GMO (from the 2009 crisis)
There is only one cure for terminal paralysis: you absolutely must have a battle plan for reinvestment and stick to it.
A Call to Charlie Munger during the last crash by Edelheit
Charlie Munger told me that bear markets & drawdowns of 40-50% are the price of admission for being an investor and that everyone goes through it.
Coronavirus Update: Find Your Voice (Of Reason), Ignore the Noise by Voya
Epidemics are said to hold up a mirror to society, revealing through our response, the good, the bad and the ugly of the environment we have collectively manufactured. The investment community should catch its breath.
Two Centuries of Pandemics and Markets by Investor Amnesia
Using a large sample of 101 global stock market indexes extending over four centuries, we find an interesting – perhaps comforting – regularity. The probability of a large positive return is higher following a decline in the market of at least -50%.
Before you get out of the stock market read this by Forbes
Investors who panicked and sold equities at the bottom of the market would have taken years to break even
Alternative Perspective on the Markets by Alpha Leonis
It is our choice of whether we allow fear or hope to dominant our thinking
How long can you handle underperforming by Meb Faber
The silver lining of this is when you understand this sobering news and allow it to temper your investing expectations, you’re more likely to benefit from the good news.
Excellent daily collection of things you want to read about by AbnormalReturns
BONUS: What we have been watching to cheer up
PS.
Also, please see our last two blogs Three Paradoxes of a Crash and Volatility vs Risk