The markets are tanking all around us. Our limbic lobes, the emotional brain centers we share with dogs, cats and horses, cry “Do something!”
That’s nature’s program for the average mammal. But we humans should be at least a little smarter than the average mammal. Often we are not.
Q3 hedge fund letters, conference, scoops etc
The sage investor Charlie Munger called it, “The Say Something Syndrome” in his legendary Harvard speech of 1995, “The Psychology of Human Misjudgment.” Charlie is also famous for a comment he made at an annual Berkshire Hathaway meeting: “I have nothing to add.” Often, doing nothing and saying nothing are the wisest courses of action — or inaction.
I know about the dangers of Do/Say Something Syndrome from my training in healthcare. Early on, I was taught to beware the demanding family of a hospitalized patient who is recovering too slowly for their liking: “Do something! Do something!”
A senior clinician wisely counseled me to not intervene at a family’s urging, lest I soon hear the complete refrain:
Do something! Do something!
My God! What have you done?
The Takeaway
Market turbulence is a time when naïve investors sell to preserve their gains, while seasoned pros hold a steady course and emerge ahead as the market rebounds and climbs. It’s not easy to do when your limbic brain screams, “Sell!”
But songs can help us calm the limbic storm. They can serve as heuristics, mental lessons and shortcuts, which bring us better outcomes than our untutored impulses.
Here are four popular songs which, through their timeless beauty and wise counsel, can help us endure turbulent financial times with the best possible outcomes:
"Let It Be" - Don’t Sell In a Market Crash
In the midst of the conflict-ridden Beatles recording sessions that produced “Get Back” and “Let It Be,” Paul McCartney recalled a dream of his mother, named Mary, who lay dying of breast cancer when he was just fourteen. She told him, “It will be all right, just let it be.”
Hence the unforgettable lyric:
When I find myself in times of trouble, Mother Mary comes to me
Speaking words of wisdom, let it be.
Heed Paul’s words — and let your portfolio be!
Selling in a market rout will likely leave you poorer in the end. If you anticipate that you will “Get Back”—Beatles fashion-- before the market rises again, you are very likely wrong. No one can reliably time the market. Those who do may do so at random, though they may appear suddenly smart rather than simply lucky.
"Tomorrow" - Markets Always Come Back
This ubiquitous anthem of hope from the 1977 Broadway musical and 1982 movie, Annie, is best known for its line, “The sun will come out tomorrow.” The lyrics were penned by Martin Charnin, who also happens to be one of the original Jets in the 1957 Broadway production of West Side Story. In a 2016 interview, Charnin said that the song would “remind cynics of the world that every now and again, it looks pretty crummy out there, and somebody is saying, ‘The sun will come out tomorrow.’”
Market bears and cynics may sound savvy, cracking wise when the going gets tough. But the proverbial permabear on Wall Street loses out in the long run: the Dow was 216 in 1950 and it’s over 24,000 today, even with recent losses. No permabear would have predicted the rise of the United States of America in 1776 or, indeed, the birth of life on our planet billions of years ago.
"Don’t Let It Bother You" - Denial Has An Evolutionary Purpose
Annie was written with the wisdom of hindsight; the Depression was only a distant memory in 1977. “Don’t Let It Bother You,” a Mack Gordon-Harry Revel tune from the Depression-era classic, The Gay Divorcee, addresses hard times in real time — 1934.
The psychological defense of denial—refusing to believe your eyes—is a huge problem in alcoholism and drug dependence. But healthy denial has a secure place in everyday life. Who ponders the dangers of driving as they commute to work each day? Yet more than three million Americans have died in vehicular accidents since 1899, and 37,133 died in 2017 alone. Contemplating those statistics on a daily basis might render us a nation of shut-ins.
Let Fats Waller, who performed the tune with his inimitable bemused detachment (and some extra riffing), tutor you in healthy denial:
Don’t let it bother you, when skies are grey.
Learn to grin, take it on the chin,
Everything will be okay!
"Life Is Just A Bowl of Cherries" - Tin Pan Goes Zen
The Tin Pan Alley team of Buddy DeSylva, Lew Brown and Ray Henderson created a Western ballad of Eastern philosophy and Greek stoicism with this popular song of the Depression. As crooned by none other than Rudy Vallee, it cautions us about our time on earth:
We’re not here to stay, we’re on a short holiday.
Life is just a bowl of cherries
Don’t take it serious, it’s too mysterious
You work, you save, you worry so
But you can’t take your dough when you go go go.
So keep repeating it’s the berries
The strongest oak must fall
The sweet things in life, to you were just loaned
So how can you lose what you’ve never owned?
Life is just a bowl of cherries
So live and laugh at it all.
And you’ll have the last laugh if you don’t sell off in fear and trembling. Remember always that shares of stock are shares of a business. Unless you must liquidate at the price anyone is willing to pay for your shares, in good times or bad, does not really matter. No more than a bunch of low-ball offers on my house, my car or my practice would matter to me. If I’m not selling, who cares?
Instead, have some cherries.
About the Author
Mark Tobak, MD, is a general adult psychiatrist in private practice. He is the former chief of inpatient geriatric psychiatry and now an attending physician at St. Vincent’s Hospital in Harrison, NY. He graduated the University at Buffalo School of Medicine and received a pre-medical certificate from the Columbia University School of General Studies. Dr. Tobak also has a law degree from Fordham University School of Law and was admitted to the NY State Bar. His work appears in the American Journal of Psychiatry, Psychiatric Times, and American Journal of Medicine and Pathology. He is the author of Anyone Can Be Rich! A Psychiatrist Provides the Mental Tools to Build Your Wealth, which received high praise from Warren Buffett. To see Mr. Buffett’s congratulatory note, visit www.marktobakmd.org/anyonecanberich
