Friends,
On April 9, 2020, Canadian comedian Julie Nolke hit the big time. In the first of a series of YouTube videos, she attempted to explain the pandemic to her January 2020 self.
A small sampling:
January 2020 Julie: I think [the Australian wildfires] are going to be the defining feature of 2020...they're a pretty big deal.
April 2020 Julie: Yeah, your definition of a pretty big deal is going to change, for sure.
The series continues with further visits detailing the George Floyd protests, the specifics of January 6th, and so on. What makes the videos so effective is the youthful ignorance of each "past" version of Julie.
The problem: we fail to see ourselves in these past "Julies."
The psychological name for this is the hindsight bias: we convince ourselves that past events were perfectly predictable before they occurred.
Read a diary from a New Yorker on September 10, 2001, or a European celebrating the end of the War-to-End-All-Wars in 1918, and you'll be reminded of just how unpredictable the future is.
This past week, the Federal Reserve cut rates by 50 basis points -- the first cuts in roughly four years. Some believe this is a bullish sign for the economy, and spending will accelerate with cheaper credit. Others believe it is a bearish sign, as rate cuts only happen right before a recession.
No matter how it turns out, you can be assured that there will be a chorus declaring, "See -- I told you so!"....as is to say that everything is about to unfold was perfectly predictable.
Our edge for long-term success comes from remembering that we'll always be the January 2020 Julie. We're unaware of what's around the corner, and we've prepared accordingly -- living below our means, and investing in wide moat businesses with acceptable valuations.
Do that consistently, and you won't ever need to predict what will happen next.
Wishing you investing success,
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Brian Feroldi, Brian Stoffel, & Brian Withers
Long Term Mindset
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