It kind of creeped up on me and I haven’t truthfully weighed its significance, but my 25th year high school reunion weekend is here. I say weekend because tonight is an alumni ice hockey game for guys in my class. It sucks but I can’t actually play in the game as I’ve been placed on IR due to a lower body injury. In hockey you usually don’t get specific about the type of injury for fear that your opponent will cause additional physical harm to the vulnerable area, but let’s just say it has something to do with a stubbed 4th toe. No, I didn’t stumble while drunk, but was involved in a rather intense game of hide-n-seek with my 5-year old daughter, who is probably as worthy of an opponent as the other 43-year old men that I would be up against on the ice this evening. But, we’ll never know as I will be resigned to keep the beer cold and spectate at tonight’s game.
Tomorrow night is the real reunion party. As is probably customary for these types of parties nowadays, a massive number of e-mails have been exchanged and Facebook pages have been created. Truthfully, I mostly delete these things and never pay much attention to the Facebook page. I’m too busy, and thus, haven’t had the time to care. That is, until yesterday when a classmate posted a link to a video created by the current students at my former high school. I suppose the intent of posting the video was to illicit some memories of the school that we left behind a quarter of a century ago. Maybe to provide some fodder for a more familiar conversation with some people that we haven’t seen in 25 years–and might not even remember. For me, it failed in this respect only because the school was just plain unrecognizable due to the many facelifts and improvements to the building over the years. Really, I thought that this video could have been created at just about any high school across the nation.
Prior to watching the video, and as a 43 year-old with little connection to young adults, my perception of high school kids has been shaped by the anecdotal stuff I hear on occasion. And it usually is not flattering. Things like rampant drug use, sex parties, video game addictions, and a general laziness (“I can’t even pay a kid to shovel my driveway…not like when we were kids”), are all parts of stories that I’ve heard in the recent past describing goings on with today’s high schoolers.
Yet, watching the video was a true delight mostly because it gave me hope for the future.
From the perspective of a money manager viewing this video, in a day where an economic recovery from the worst recession in 80 years is in question, you’d notice that the level of skepticism has not penetrated the high school halls. An overwhelming feeling of hope and optimism permeate every frame of this video. Of equal note, the level of creativity, organization, drive and professional quality production from these high school students is awe inspiring.
Readers of my newsletters and blog will be familiar with my rants about removing emotions from investment decisions. At the same time, these same readers are also familiar with my opinion on the dramatic impact that emotions have on economic fundamentals. Hope and pessimism are only feelings. They are not empirical. European debt problems, a fiscal cliff, mounting debt, a Chinese slowdown, and high unemployment bring a twofer of pain—they can be empirically measured to cause economic damage and they bring psychological pessimism, too. As I’ve been writing about for years, business owners don’t hire when they’re skeptical about economic recovery, homes are not purchased today when buyers think the price of the home will fall tomorrow, and investors pull their money from stocks when they get nervous. Yes, emotions do impact the fundamentals of the economy in a big way.
So, what am I suggesting, that we all load up with 2x the leverage on equities because of some hopeful message in a high school video? Don’t be ridiculous. All I’m saying is that this “can do” attitude that translates through the images on the video, let alone the organization it took to create the video, is not to be discounted. Optimism will once again return to the economy even given the headwinds that exist. And once it does the money flow will lift equity markets in a sustainable fashion.
Until then, one must remain nimble with market exposure because the economic news flow will translate into choppy markets. At the same time, it wouldn’t hurt to have a little hope. I think the link below will provide some of that…