Good morning (evening) & happy Monday (Sunday night)!
“In every human being there is both garbage and gold, it is up to us to choose what we pay attention to.”
Werner Erhard, author
I recently watched a special report about the finances of the waste management industry, and I learned something fascinating. Any idea how much trash is discarded every day? 4 ½ pounds per person per day.
I was quite surprised by that number as it seemed significantly high to me. 4 ½ pounds per person per day … that’s 135 pounds per person per month … 1,620 pounds per person per year. Now, I’m a reasonably environmentally conscious guy so I try to reduce, reuse, and recycle, but if those averages were applied to my home (4 residents) we would throw away 6,480 pounds of trash per year. That’s a lot of garbage!
We all have garbage in our lives. Be it bad habits, toxic relationships, or painful experiences, garbage is everywhere. Sometimes it seems like our world is in the garbage selling business.
Nowhere is that truer than the financial news media. What they are selling is garbage. Here’s a sampling of recent headlines I came across on CNBC.com:
- “Cramer says charts suggest the long bond may ‘get hammered’ in coming weeks”
- “Baird downgrades Capital One, sees 17% pullback ahead”
- “Don’t buy Dave & Buster’s stock now as casual dining slows, Stifel says”
- “Markets are ‘having their cake and they’re eating it too’”
- “September is the toughest month for stocks, but this time could be different”
- “Analyst picks two electric vehicle makers that can ride out global chip shortage”
- “Three reasons why UBS believes the S&P 500 can rally to 5,000”
- “Goldman believes this trade will return more than 20% over the next 12 months”
Pardon me while I roll my eyes. As many of you have heard me say “there are only 2 kinds of people when it comes to the stock market: 1) those who don’t know and 2) those who don’t know they don’t know.” These headlines may draw clicks (thus ad revenue), but they do very little to help investors. Trash.
As a sports fan these types of useless analysis’ are oftentimes found at halftime of a sporting event. A commentator might say something along the lines of “The way I see it, for the team trailing to win they are really going to need to outscore their opponents in the 2nd half.” Wow! You don’t say 😉
I will encourage each one of us to take such market analysis with a grain of salt. As long-term, diligent, diversified, discipled investors we don’t fall for such headlines … we recognize them for what they are … trash that tries to distract us from what truly matters.
If I want to live a healthier lifestyle, I should eat less trash (example: fast food, etc.). If I want to raise my kids in a healthier home, I will reduce the trash they are exposed to (example: bad movies, etc.). If I want to be a healthier investor, I will intentionally limit the amount of trash (example: financial news, etc.) I allow to seep into my mind.
I hope these weekly memos are helpful in creating a helpful diet of useful information that makes us all better.
Thanks for the trust you have put in me and our team … we will continue to work hard for you.