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Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better.

Today's Issue Read Time: <2 minutes

Lesson: Lessons from Howard Marks
Timeless Content: Howard Marks Talks Tariffs
Thread: Importance of Company Mission Statements
Resource: Wes Moss' Retirement Calculator
And more!

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The last two weeks, we've written to you about the virtues of remaining cautious (even -- dare we say -- "bearish") in the face of a trade war with the rest of the world.

Today, we'd like to offer a different perspective.

In September 2008, famed investor Howard Marks wrote a piece titled Nobody Knows. In it, he argued that the entire financial system was in disarray: banks took on far too much risk in the real-estate market, and packaged mortgages in such a way that the entire system could be brought down.

You might think his conclusion was that investors should get out of the market.

In reality, it was the exact opposite:

"Nobody knew -- especially me -- whether the spiral could be arrested. Nevertheless, I concluded that we had to assume it would, and thus that we should plow money into financial assets at their highly discounted prices." [emphasis added]

Think about what Marks is saying here: if the world ends (whatever that means), the stock market will be the least of our concerns. Even though there was no clear path to resolution, investing thus became less risky. If the entire system crashed, we'd all be on our own anyway. If it didn't, we'd have some valuable assets.

Importantly, the tariff-induced anxiety of 2025 is fundamentally different than 2008: asset prices haven't fallen nearly as much (yet), and the panic is largely self-induced. That led Marks to write a follow-up last month: Nobody Knows (Yet Again).

However, the bottom line remains the same: these things do eventually work themselves out. As Mark Twain once said (and Marks references in his writing): "history doesn't repeat itself, but it often rhymes."

As the next few months develop, remember this lesson -- it will likely help you to position yourself not for short-term gains, but long-term wealth-creation.

Wishing you investing success,

Brian Feroldi, Brian Stoffel, & Brian Withers

Long Term Mindset

One simple graphic

One piece of timeless content

Permanent Equity's CIO, Tim Hansen proposed "...while recessions are unpredictable, they are also unavoidable..." in his article titled A Recession Is Coming. Click the link to hear his advice for investors.

One thread

Brian Feroldi

@BrianFeroldi

10 Reasons Why You Have An Edge Over Professional Money Managers
1⃣High fees: 
Management fees act as a drag on returns
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7:31 AM • Oct 20, 2020

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One resource

Withers has been investing in dividend stocks for the last few years as he approaches retirement. He was excited to find out about the Chowder Rule as a rule of thumb for income investors seeking high-quality dividend payers.