A reader asks:
Ben Carlson, do you think it’s fair to describe you as a permabull?
This is a fair question.
I am a big proponent of thinking and acting for the long-term, buy & hold investing and keeping an optimistic bias about the future. I am a glass-is-half-full kind of guy.
If the choice were between being a permabull or permabear I’d choose permabull all day long. Permabears are the bane of my existence.
But I wouldn’t describe myself as a permabull for the simple fact that I know bad things can and will happen. It’s hard to be bullish all the time when you know downturns are inevitable.
This week I was doing some back-of-the-envelope retirement projections. I’m 43 years old. I have no idea when I’ll want to retire but I assumed 65 just because that’s the standard number. So I’ve got 20+ years to go.
In those two-plus decades, there will probably be two to three recessions, three to four bear markets, at least one giant market crash, maybe a financial crisis or two, geopolitical crises, war, political upheaval, and a few events that are completely out of left field (like a pandemic).
No one knows these things for certain, but that’s my baseline assumption. I know bad things will happen and I’m still investing for the long haul and optimistic about the future.
I was asked in a recent interview to share three of my favorite underrated investing books. One of those selections was Devil Take The Hindmost by Edward Chancellor.1
It’s my all-time favorite financial history book. Each chapter provides a historical account of speculation gone wrong — from the original stock markets in the 1600s to the South Sea bubble, the Railway Mania, the 1929 crash and the Japan Bubble Economy of the 1980s.