Dear Mr. Market:
Behind the curtain of this investment blog and our series of letters to a fictional market character (Mr. Market)…there are actual human beings. We’re certainly not hiding behind a fluffy topic, but on days like today we want to share how life can parallel with things like the stock market; it can also really put things in perspective as we look back at where we were at certain points in life. Additionally, it sometimes helps people know that unlike many other articles and financial advisors you’ll find on the internet, My Portfolio Guide doesn’t cut and paste regurgitated garbage or use a ghost writer to relay our message.
Today is March 13th…Friday the 13th! Today it’s also me, Matthew Pixa, who is writing to you and letting you know that it’s the day my daughter Isabel turns 18. Perhaps we’ll do more of these personal articles but it won’t hurt our feelings if you don’t want to read about my baby girl’s birthday when the stock market is down -25%. You be the judge, but please read on and see where I’m going with this.
Today I write in personal form for several reasons. Your worst day/time in life can be someone’s best day/time in life. At the passing of a beloved family member or friend, someone else in the world is celebrating the birth of a child or some other joyous event.
Isabel turns 18 today but I vividly remember the day she was born. This first time father was ecstatic and also worried out of his skull. As a financial advisor I was in the first five years of guiding people and their finances. I had just bought my first home and was about to start a family. My wife and I stared at her in both joy and amazement like any set of new parents. We were scared out of our minds and later that year we wondered what life would be like for her and this world as the horrific events of 9/11 hit us just six months after her birth.
As it relates to the stock market…those times were absolutely brutal. If you think the recent months have been bad…put your mind back into 2002 for just a bit. As you’ll recall, those were the days of the “Dot Com Crash” but what was different was how it all transpired. Being that it was a “tech crash” I’ll focus on the Nasdaq (which is primarily a tech and biotech weighted index). The year 2000 saw the Nasdaq go down -39.28% from 4,069 to 2,470. As a young advisor in my early 30s, this was the first bear market I counseled clients in. Prior to that, all my historical studies , advanced college degrees, or financial licenses didn’t matter; I had not literally been through an actual bear market. Yes, technically…I bought my first stock in 1987 after that crash (-23% in one day!) but until you manage millions of dollars… of someone else’s money…history books don’t mean zilch!
Move on to the next year after telling clients to “hang in there” and “stay the course”…What did 2001 bring? Another absolute market whooping! The Nasdaq lost another -21.05% and went from 2,470 down to 1,950. Certainly things were overdone and like all other markets it would eventually come back, right? Not even close…
The next year, the Nasdaq went down another -31.53% cratering from 1,950 all the way down to 1,335. If you don’t have your calculator on hand, from peak to trough that resulted in a total loss of -67.19%! 18 years later we climbed up +404% at the recent peaks of the Nasdaq. In summation, this third year of destruction marked the only time in history (including those of the Great Depression) where we witnessed three consecutive years of massive losses.
On the morning of March 13th, 2002, I was knee deep in back to back to back meetings while working at Charles Schwab. Each and every meeting was a non-stop battery of dealing with a market that seemingly had no bottom. People were devastated and company morale was at cesspool levels. Nobody trusted tomorrow and with the ensuing events of 9/11 our world had permanently changed. My wife’s water had broke and she was frantically calling Charles Schwab but nobody could answer the phone. FYI- Most people didn’t have smart phones to text or grab my eyes away from each distraught client I sat with. My wife and I joke now (at least I do) but one silver lining is that when I eventually got to the hospital she was basically out and in labor for eight hours and it coincided with the first day of March Madness. (allowing me to watch all the opening day basketball games while she slept!). Turning to today and the Coronavirus environment we’re all in…the NCAA tournament will be played with zero fans in attendance.
For the past 18 years God has blessed us with a beautiful, driven, caring, and truly special human being. We’re so proud of Isabel and beyond excited to learn where life takes her. A few years later the delivery stork gave my wife Cecilia and I our son Lance. To further expand on our theme of the “best and worst days”, he happened to have been born on 9/11. Albeit not the actual day of the terrorist attacks, I’ll never forget bringing him into work on his birthday a few years later. My secretary at the time looked at his fat face and with a depressing grin said, “oh.. today is your birthday? I’m sooooo sorry little man…”. We drove home that afternoon and he asked, “Papa…why did that mean lady not like my birthday? What’s wrong with her…today is a great day, right?”
Lastly, with regard to our best and worst days…I will never forget the tragedy of losing my father in a fire. Literally on the anniversary of his death I received a call from one of my best friends and former college roommates in Louisiana. He was so proud to announce his son Brent was born and honored me with the momentous occasion by asking me to be the Godfather. What a fine young man he has become and is now a thriving engineering student at the University of Alabama. Roll Tide!
As we mentioned in our most recent article, it’s darkest right before dawn, this environment feels absolutely awful. While we’re not advocating to bury your head in the sand and pretend that everything is fine out there, the perspective we need is often hard to grasp when it counts the most. Hug and cherish your loved ones. We all hear that but please try and actually do that today.
Happy 18th Birthday dearest Isabel. Your Papa and Mama are so proud of you, and tonight as we share dinner celebrating you, I’m going to help you buy your first stock with your babysitting money! Sorry if you had other plans in mind but in this house that’s the way it goes. I bought my first set of stocks at the age of 18 with the $900 net worth I had saved from mowing lawns, washing windows, and delivering pizza. Almost four decades later I still own IBM, Home Depot, Pfizer, Merck, and what was once Blockbuster Video. I’ve learned a lot through all those ups and downs and strongly suspect, that God willing, we’ll be higher than we are now in the next 18 years.