Pardon me as I share a comment from my Facebook wall (friend me).
“Tom, the fact you can be so honest and brave by writing your most personal life story is amazing to me.” What other choice do I have? The comment was tagged to the post, Whirling Dreams, which was about my reaction to the Triple Whammy of dismal performance of my three main stocks (AMSC, DNDN, MVIS). I could act tough and pretend that nothing was wrong and that the investing strategy in my book never falters. I could act totally relaxed and trust completely that the universe will provide. Instead I try, and evidently succeed at some level, to be honest about what happens in my life.
“All the world’s a stage . . . ” – As You Like It, William Shakespeare.
All the world may be a stage but I’ve played a part, worn a facade, in the past and I found that in the end that was a tough act.
For those of you who don’t follow links, the quick synopsis is that with eerie coincidence, my largest asset, DNDN, dropped 60% the same day that the markets began their major league hiccups. A portfolio that was poised to make significant progress towards “enough” turned the other way. My net worth dropped from several years of living expenses to a cause for concern. Most people assumed that my situation degraded because of the general market. Nope. One company missed earnings by 20% and the stock dropped 60%. My resumes began making the rounds (unsubtle plug: skills resume, chronological resume, artist resume). Keep passing those along folks.
I wasn’t a happy camper, unless I was camping (Hollyhock was nice). It is unsettling to be prepared for an uplift and get hit by a downdraft. Friends consoled me with unsolicited phone calls. Talking always makes it easier to get through tough times. Yet, many talked about how long it would take the market to recover. One aspect of my style of investing is that my portfolio’s swings, and therefore some of my emotional swings, are tied to companies and their stocks instead of the market. The advantage is that I don’t have to worry as much about global economics. The disadvantage is that companies small enough to be disconnected from the market typically undergo greater swings. I could act as if the swings didn’t affect me, but they do; and life is harder if I act as if they didn’t.
A couple of weeks have gone by. Psychologists can probably analyze the various emotional stages I’ve passed through. After last week at a think-tank event at Hollyhock, the internal chaos has subsided from hurricane-strength to merely a small-boat advisory. I didn’t want to look at the market, my portfolio, and even downplayed my book if the topic came up. Now though, I’ve poked my turtle head out of the shell and looked around.
The markets aren’t a happy place. To an amateur like me, it looks like storm clouds raging far overhead with occasional downbursts causing flooding and random lightning whose thunder reaches far beyond the strikes. The finance gods are warring and we’re only catching glimpses of the battles. All this because AAA became AA+? I was always happy when I got a single A. Something else must be going on.
My portfolio isn’t a happy place either. Some stocks are recovering, but unless my recovery happens sooner and stronger, or I find sufficient revenue elsewhere, I’ll be tapping into my IRA by the end of the year.
Ironically, when I lost confidence in my book, Dream. Invest. Live., sales happened. That was unexpected. The book was first printed just as the market crashed a few years ago. It was a bad time to finish and try to sell a book on personal investing based on an individual’s stock strategy. Oops.
A sale of my own book brought me back around. What was in there that I could use? How could I learn from myself?
One of the investing mantras I use around fellow stockholders is, “What’s the company worth?” The question usually comes up because a stock price is up or down, or because someone wants to buy or sell. My stocks were down, but what were the companies worth? A quick review convinced me that the companies were doing reasonably well. Each had a bit of bad news, but each bit of bad news was potentially temporary; and I felt that each company had entire potential product lines that weren’t reflected in the financial institution’s stock valuations. Even a reduced valuation was potentially more than enough, possibly, eventually for my portfolio to fund my lifestyle and more. My portfolio of companies was fine. The current value of my stock portfolio was the only problem.
Renewed confidence in myself and the future changed my outlook. Dream jobs exist, and my varied skills and ability to adapt mean I can be enthused about possibilities that range from engineering to art to advocacy to entrepreneurship to fill_in_the_blank. I also realize that smaller jobs, short but deep writing assignments, organizational consulting, facilitation, public speaking, etc. could be fun and satisfying and make a big improvement in my cash flow. Even my current projects in my books, photos, and classes can help significantly. Instead of living in fear I began to live within enthusiasm.
I don’t think I could have made that progress if I’d fallen into an act of toughing it out.
During one of the sessions at Hollyhock I had the opportunity to describe my response to the recent crisis. I made the point that my disruption was disassociated from the market turmoil. I’m sure my point didn’t register with the audience that ranged from struggling artists to major financiers. No matter. The main point I made was that in the process of living a frugal life I’ve had to understand my values, my skills, my needs, my wants, and where help is very handy. Living frugally is a glass-half-full life. To many it looks half-empty, but from within there’s an appreciation for what’s there. Asking those questions is tough. Answering those questions is empowering. Acting is replaced with action, and that can be fun.