C Garrett Moore, CFP®
The Case For Optimism
“Never bet against America.” - Warren Buffett, May 2nd, 2020 “Real optimists don’t believe that everything will be great. That’s complacency. Optimism is a belief that the odds of a good outcome are in your favor over time, even when there will be setbacks along the way. The simple idea that most people wake up in the morning trying to make things a little better and more productive than wake up looking to cause trouble is the foundation of optimism.” - Morgan Housel
This morning, Pfizer announced that their COVID-19 vaccine prevented 90% of infections in their most recent trial, and the global stock markets are rallying substantially as a result. As such, I’d like to share some brief thoughts on optimism, investing, the human spirit, and how they all go hand in hand. In light of Warren Buffet’s quote above, I think it's most helpful to look at this through the contrary position. Betting against America would have been a bet entailing the following: That the nation’s smartest minds at countless drug companies weren’t going to work towards a vaccine and treatments. That, regardless of your political standing, the government wasn’t going to do something to help. That the Federal Reserve wasn’t going to do something to help. That people weren’t going to think creatively and with compassion, such as Tesla producing life support equipment, or the countless companies that pivoted to work-from-home arrangements. That teachers all over the country wouldn't figure out how to use YouTube, Microsoft Teams, Zoom, and countless other tools to teach remotely. That our healthcare workers weren’t going to work tirelessly to help, sometimes giving their lives in unfathomable acts of selflessness. In summation, you would have bet that, collectively and on average, humans do not conquer the problems they face. I’ll take the opposite side of that bet any day of the week. We are not out of the woods yet. This pandemic will almost assuredly have a negative effect on the markets at some point again, it will cause more hardship, and it will sadly take more lives as well. Yet, I believe the point remains. I hope this will ever so slightly transform your heart and perspective on investing, because if I had to name one common character trait that exists among successful investors, it would be optimism; particularly the ability to remain so when things look most bleak. I would surmise that it leads to a better life in general, as well.
"Pessimists sound intelligent but it is optimists who make money."
- D. Muthukrishnan