My grandfather used to repeatedly say, “I’ve never met a rich pessimist.” I believed him until I moved to New York, where rich pessimists abound. Hence, I’ve modified his adage and will one day badger my future grandkids with: “I’ve never met a happy pessimist.”
This week I was visiting with a friend who runs a mass-market financial publisher. His role gives him a unique read on the current psyche of the “man in the street”. (He knows what they’re reading and buying.) What, I asked, was the mood of his readers? Are they becoming more positive as the markets and economy appear to be recovering? He said, “Just the opposite. People are terrified.”
It’s easy to see why. No one worries more than I do over the ultimate consequences of our deficits, currency debasement, and apparent social degeneration. But I don’t want to turn into an old, grumpy uncle. Who wants to sit next to that guy at Thanksgiving?
The other reason for not following the negative crowd is money. The contrarian investor in me wants to find opportunity where others fear to hunt. Even if pessimists are right and danger lurks ahead, so does opportunity for those seeking it. Amidst all the negative noise, there are great people out there building great businesses. We will all do far better for our psyches, not to mention our bank accounts, by focusing our energies on what could go right rather than what can go wrong. My quest is to identify great leaders running great businesses and learn from them. And if possible, invest alongside them. This is why one of Fielder’s strategies is to invest in portfolios of founder-run companies. Over time, owning great things should beget great things. (I’ll probably say this to my grandkids a lot too.)
Pessimists prefer to call themselves realists. Yet, a true realist can see the positives too. Granted, the pessimists’ predictions will be right every so often. They’ll win some battles, but they’ll lose the war. I've learned this from personal experience. Trust me, winning battles is over-rated. With this in mind, the following excerpt from Ben Franklin's autobiography made me laugh:
Amen of the Week
“There are croakers in every country, always boding its ruin. Such a one lived in Philadelphia; a person of note, an elderly man, with a wise look and a very grave manner of speaking; his name was Samuel Mickle. This gentleman, a stranger to me, stopt (sic) one day at my door, and asked me if I was the young man who had lately opened a new printing-home. Being answered in the affirmative, he said he was sorry for me, because it was an expensive undertaking, and the expense would be lost; for Philadelphia was a sinking place, the people already half bankrupts, or near being so; all appearances to the contrary, such as new buildings and the rise of rents, being to his certain knowledge fallacious; for they were, in fact, among the things that would soon ruin us. And he gave me such a detail of misfortunes now existing, or that were soon to exist, that he left me half melancholy. Had I known him before I engaged in this business, probably I never should have done it. This man continued to live in this decaying place, and to declaim in the same strain, refusing for many years to buy a house there, because all was going to destruction; and at last I had the pleasure of seeing him give five times as much for one as he might have bought it for when he first began his croaking.”
- Ben Franklin, founder/inventor of many things
(from The Autobiography of Ben Franklin)
The sad sequel to this tale is Croaker Byrd not buying Brooklyn real estate in 2009.
Yours in the Field,
Frank Byrd, CFA
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