Updated: Apr 19
William O'Neil who founded a newspaper named "Investor's Business Daily." He said one thing that stuck with me forever. It is a universal truth that extends far beyond finance.
He observed that in the market there are basically two emotions, hope and fear. “The only problem,” he added, “is we hope when we should fear, and we fear when we should hope.” I think this is true of many big decisions when we feel we are making a commitment.
Too often we give up on a project when we should persevere. Or we hope things will work out when we should take a deeper look and maybe get out.
The fascinating part is that the millions of small decisions we make are also commitments, we just don't see them that way. But a daily starbucks Frappuccino means you are also choosing NOT to invest $6 x 30 = $180 per month into your bank account. You are making a decision not have $100,000 in your bank account eventually.
The universal part is simply to put on the proverbial, green, eye shades and do the homework. It does not matter what the decision may be.
So right now, with the CoronaVirus pandemic, I see a lot of people hoping when they should fear. It's understandable to be confused because public figures say pacifying things, in part to avoid panic. I am looking at the numbers, William O'Neil style. The facts are these:
The rate of deaths in rising in the US- not just the total but the rate of increase it trending up
The US curve is not flattening as we had hoped--and despite statements in the news.
We are now crossing all the other curve lines of the other countries
Public figures post good news but the real data is not as good--but it's hidden.
So, I see folks playing frisbee in the park by the shore the lake Here in Austin, and I see and hear about small dinner parties happening. I have a friend starting out today on a cross-country trip. I also hear about deaths and people silently grieving.
Bill O'Neil also makes a statement about crowd mentality. He said that when a stock is obvious and exciting to everyone, that it's probably way too late. Most of you have probably experienced that at least once.
This concept is not true of insurance. Insurance is a contract. It is not speculative because it's signed agreement, not a stock. The part that is speculative is qualifying because it is offered to the healthy and it's not always offered.
And in the case of COVID, our company unfortunately no longer offers the ICU policy in some states. It honors the contracts it already has of course. Likewise, if you have certain conditions recently, might not qualify.
So the gamble is with yourself. In effect, we are the stock with the value. The only thing we know for certain is that it is never going to be a better value than it is today.
When it's a good plan as the one I represent, we lead with the coverage, and this is so rare, that it makes people excited and then nervous. Often people ask, "What's the catch?" (When it's a weak plan, you have to ask 27 questions to understand what you get, you still might never figure it out.)
Here is the catch. It takes a moment of attention to sit down and sign up. And honestly it is a certain kind of wise and brave person who has a deeper sense of courage and profound self care. It takes that special kind of self love. Not love of Beyoncé or JLo -- no harm there -- but the wise, expansive caring about you and yours and what happens to them if there's a man down.
I have had that conversation with people and I have had it with myself. And I know that when we face our fears, served with a side dish of vulnerability we realize that stuff happens and we simply can't outrun every situation, that we won't be at work if this happens, that major medical is unpredictable and finds a way to exclude things whimsically, and that our employer will probably replace us for the short or long term. The situation we are insuring against might be 10 -15 years away but we are locking in that stock price now, while it's low and available.
And when the day comes that you think it will be awfully darn great to have this coverage, you can act like it was all an accident, a good bet that paid off, or bad luck that just happens if you chose not to opt for it. Everyone has a crisis eventually. Bill O'Neil will know, from up there in Investor heaven, how you end up paying for it, with our money, or your hard won savings, your home equity, your divorce settlement or your inheritance from your mom, either way it's someone's money that that took years of sacrifice to accumulate. So, I say better our money coming to you than theirs.
Sorry to sound like your dad. It might be time to invest your energy and money into something that will invest in you. Maybe we have had enough instagram celebrity and social media but now get some foundation under you. Start by remembering to invest in someone who will send you a check when you really need it.
Know that you won't need to fear for the future, because you did the work and understood the risks now. Build that muscle of understanding that hope vs fear equation. Some people never build it. I think you can. I believe in you.