Thursday, October 9, 2008

Of rising and falling markets

It's been a long day. Or rather, a long week.

Or really, a long month.

Today, the stock market hit its lowest point since May 21, 2003...on the one year anniversary of hitting it's all-time high a year ago.

I haven't personally blogged much about this, given the fact that our industry and firm are so highly regulated. That said, this post won't provide any financial advice, but will share some of my thoughts and impressions.

First of all, to everyone who has reached out to me personally in the last few weeks...thank you. Thank you for your understanding that I truly am behind in returning personal phone calls and emails. Thank you for your prayers of support and love. Thank you for accepting that balancing both a challenging pregnancy and a volatile market make for little time for anything else. Most days, I come home and sleep for three or four hours until Jonathan gets home. We have dinner, and I go back to bed.

Honestly, the last few weeks have been mentally and physically exhausting. Angus is learning what it's like to live in a family that works in the financial industry.

On the brighter side, it is one of the joys of working with your family and with a fantastic weather the storms together. I remember the first weeks following 9/11 in the much I relied on Dad for his expertise and direction. He now has 35 years under his belt, and I'm heading into my 10th year with our team. One of my favorite quotes has been in Dad's office for years...and is paraphrased in these lyrics:

This storm will pass...and it's up to us to trust Him throughout, especially when the times seem the darkest.

I have memories back to when I was 10 years old. On October 19, 1987, when the market dropped 23% in one day. Dad worked a long day, and forgot to pick me up from volleyball practice at St. Charles. I sat in front of the gym long into the evening, waiting for him to show up.

I have memories back to my senior year in college in 1998, studying economics and finance when the Long Term Capital Management hedge fund crisis hit. I was stunned that Scholes and Merton, who were so revered in my classes and throughout the world - receiving the 1997 Nobel Prize in economics the year before - were behind one of the largest hedge fund failures ever.

And 10 years ago last month, the government stepped in with a $3.625 billion bailout through major financial institutions. I returned home from college, and in a sign of solidarity with Dad, voluntarily cut my monthly stipend that I received for school costs.

Perspective is terribly difficult to find at a time like this, when it's hard to see to the end of the week, much less the end of the day.

But it needs to be there.

I worry about the drift we are seeing away from a capitalist society and towards socialism with an ever increasing presence of the government to solve all of our problems. It's one of the reasons that this election is so crucial to our future. What makes this nation great is the passion that we all have to excel...and the opportunities that are afforded through this incredible free country...the power to both succeed and fail on our own.

As my favorite financial guru Nick Murray says, "No one can imagine the great leaps in science, medicine, globalized trade and finance, and human productivity that information technology will spawn in these ten years – any more than anyone could ten years ago tonight."

I look back to how dire things were when LTCM failed...and see how incredibly far we have come since 1998.

Or how far it's come since sitting in front of the St. Charles gym in my uniform and pigtails in 1987, not fully understanding what a 23% drop meant...but knowing it wasn't good. How far has America come in 21 years.

And here's looking ahead to 2018 with that same hope.

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