Moreover, now that the implementation of the tariffs has been pushed back 90 days one may legitimately begin to wonder what the fuss was all about. 

 

The apocalyptic hysteria of mainstream media, and the resultant historic crescendo of terror in investor psychology, combine to suggest that the recent bearishness may have been somewhat – how shall I put this gently – overdone.

 

As always, investors who stand by their plan are already having a meaningfully more positive experience than people who capitulated in the depths of the panic.

To drive home the companies versus stocks distinction, consider this thought experiment. List ten companies whose products and services your family uses nearly every day.

Example

1. Apple. We have two Apple latops and one iPhone.
2. Alphabet. Most of our family owns Google Pixel phones and we google stuff a jillion times a day.
3. Netflix. Somebody’s always watching something.
4. T-Mobile/Mint. The wireless carrier of our phones.
5. U.S Bank. We bank there.
6. USAA. Carries our personal and business insurance.
7. Procter & Gamble. The family consensus is that Bounty is, in actual fact, the quicker picker-upper.
8. Amazon. Somebody’s always ordering something.
9. Citibank. Many of our credit cards are issued by Citi and are in constant use.
10. Berkshire Hathaway. Seems like our lives run on Duracell batteries!

Would you stop using any of these products and services if the stock market went down 50%?

 

No, of course not. And neither would just about anyone else. That’s the critical difference between stocks and companies. Stock prices can crater, and they often do, if only temporarily so far. But as long as real people continue to buy the products and services of great companies like the ones I’ve just named, they’ll endure. And, if history is any guide, they’ll resume the gradual increase in their earnings and dividends — a process that has delivered an average annual compound 10% return for almost a century.

The COVID pandemic may be over, but the experience continues to influence society and investments. Equity portfolio manager Cheryl Frank discusses lessons learned from the pandemic with Mike Gitlin, noting that several industries and themes remain in flux, from commercial real estate and health care to labor market dynamics.

 

Within health care, Cheryl discusses how regulatory changes could impact the industry significantly given the government’s role as the largest payer. She also shares insights from her widely read research paper, “The Girlfriends’ Guide to Stocks,” which compares investing to dating and highlights elements of a healthy long-term relationship. 

1. -5% 
2. -10% 
3. -15%
4. -20%
5. -30%
6. -40%

Answer = #3. -15%

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