Letter from Jack

“How wrong can you be!”

It was a message scribbled on a blue post-it note, stuck to a worn and folded newspaper clipping. The clipping was of a column I’d written for the local paper about 15 months prior to the note being written. I came across this old bit of correspondence just this week while cleaning out an old file drawer.

“Well, Byron – I think I’ve held on to this column long enough. How wrong can you be! Glad I didn’t invest on your advice – I’d have lost a lot of money falsely waiting on this to happen. Jack..”


Wiley Hilburn taught me that if you write for a newspaper, you’d better be ready for some negative reader responses once in a while. He got some uninvited reader feedback at a bar after work one night. He got punched in the nose. 

Thankfully, Jack stuck to words. 

The offending column, which I’d written 15 months earlier, came with the headline “Stock market woes won’t be around forever.” In it, I cautioned against losing patience with what had already become a protracted bear market. 

Jack had highlighted a couple of paragraphs I’d written.

I wrote, “The average bear market (a decline of 20 percent or more in stocks) lasts only eight months.”  The bear market we were in would last about two and a half years from top to bottom. Strike one.

“On average, 75 percent of the loss is recouped within seven months with full recovery within just a year,” I continued. At the bottom of that bear market, it would take another two and a half years for the market to recover to its old highs. Strike two. 

Jack also included a cartoon in the column clipping. It showed a man stranded on a desert island, lying beneath the only palm tree on the entire island. He had written beside the character “Jack.”

The second panel showed an alien spaceship swooping down to the island and the man crying out, “Thank God. I’m saved!”

The third panel showed the spaceship flying away with the palm tree on board and the man left alone on the island, staring up at the departing spaceship. Jack had written below the man left on the island, “Waiting on Byron.” Strike three.  

Jack had waited 15 months to tell me how wrong I was. My offending column had been written in March 2001 (about a year after a huge, ugly bear market began) and Jack had sent me his opinion about my prognostic abilities in July 2002. 

On July 1, 2002, the S&P 500 stock index closed at 903. Today it is around 3,000.

I never had the pleasure of meeting Jack and he never had the pleasure of punching me in the nose.

I haven’t changed my tune in these 18 years, but I think I’m a bit more careful about making sure readers and clients understand what I mean when I use language like “long-term.” 

No one can say whether the nascent coronavirus scare will be a distant memory by Labor Day, or if we will mark it as the straw the broke the back of an extended bull market.  

What I can say with confidence is this bull market, like every one before it, will come to a normal, natural, cyclical end. A day of pruning will come. And when it does, many will rage and complain that it was supposed to be different this time. They weren’t supposed to lose money in the market.

So, let’s be very clear… “long-term” is longer than you think. But you can start your thinking at no less than five years, and that could easily stretch into ten. 

And a nearly guaranteed, time-tested, sure-fire way to lose money in the stock market is to sell when all the talking heads on TV are overusing words like “crisis” and featuring story after story about “record losses in your 401(k).” 

Wealth is made in markets by the prudent and the patient. 

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information at https://ruston.argentadvisors.com/important-disclosure-information

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