Beyond The Headlines
Last week, my wife Megan and I enjoyed the company of a German-Brazilian couple who also found refuge in our quaint seaside town. They sail and surf and have navigated the COVID travel realities getting stuck places and changing plans quickly. We compared notes and shared our experiences. We thought we pack light, but they pack even lighter. Megan brought up the topic of searching for what’s essential in the last 12 months. Beyond health, family, friends – what else is truly essential?
It made me think of a book I was reading in the early days of our work from home experiment with the stock market experiencing 4%-plus swings up and down daily, the pandemic anxiety peaking in our household – “The Power of Less: The Fine Art of Limiting Yourself to the Essential…in Business and in Life” by Leo Babauta – a blogger, and author focused on productivity. It offered a very helpful framework for the year ahead.
Before 2020, I never had to wonder what I would take with me if I had to pack for one year or two? What is that essential? Last year, I had to do it twice, first in my office of four years and then in my city apartment. This experience set the tone for the following months, and it had an immense impact on how we live, work, and invest.
In early March of last year, I called off my business trip. I took a cab to the office; I packed all I needed. I scanned some checklists, to-do lists; I uploaded some files to our cloud storage, and I left. It’s been over a year! That’s the longest time in my adult life that I haven’t worn a suit, by the way.
A month later, Megan and I went through a similar experience leaving our apartment. We had a tight schedule. Our move to a remote cabin in the woods was a very last-minute decision. We could only take what would fit in the trunk of our car. Eventually, we ended up with even less catching a flight to our current destination.
It wasn’t just the office or our home that required a refocus on the essential. Our investment approach also experienced a similar minimalist moment. From going into the market correction in March 2020 to riding out the quick recovery and rally in stocks, we had to double down on the highest conviction holdings, promptly sell what proved to be “dead weight,” and leave room for further buying opportunities, which followed later in the year.
It’s been a time for bold, decisive moves, and the path ahead was far from clear. As you may remember, we had been cautious about the markets for a while. We were fortunate enough to go into the 2020 correction with what we considered to be ample cash, market protection (a volatility ETF (exchange-traded fund), and a gold ETF), and already well-selected core holdings. When the stock market lost about 1/3 of its value in March, we knew that the timer is counting down quickly, and we must act fast. We bought many holdings at their lowest prices in many years. This massive reshuffle in the portfolios allowed us to benefit from the recovery that followed.
When it comes to our investment and research process, I noticed how the last 12 months made us focus on what’s essential. In March, April, and May, we had lots of work to do in a short period of time, and it set the tone for the rest of the year as well. I cleaned up my email inbox, unsubscribed from a lot of non-essential newsletters. I turned off the news alerts on my phone. I narrowed my information consumption only to what really helps me keep up with what’s going on and allows me to do a better job, but nothing more. I built a more efficient daily routine with ample time to read, write, take calls, listen to a podcast or two. I cherish my big blocks of uninterrupted deep work.
Without the daily commute, I even found time for some more regular physical activity, reading for pleasure, or even learning another language. If you can keep a secret, I’ll tell you that I also nap now, and then, that’s something I craved for years but couldn’t really do in the office. Since I often start the day with a sunrise surfing session, a quick power nap midday helps me recoup my energy. It does magic to my productivity and focus, too.
Our experience tells us that there is never a dull moment in investing, and we always have to be prepared to be surprised. When that happens, though, we like to think that we are positioned to be the least wrong no matter what cards we are dealt. That’s been the goal going into 2020, that’s the goal in 2021, and that will remain the goal when the pandemic is far in the rear-view mirror.
Today though, might be a good time to pause and wonder what’s essential – in life, work, and investing.
The information provided in this article represents the opinions of Sicart Associates, LLC (“Sicart”) and is expressed as of the date hereof and is subject to change. Sicart assumes no obligation to update or otherwise revise our opinions or this article. The observations and views expressed herein may be changed by Sicart at any time without notice.
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