Welcome to Autumn

People normally associate spring with rain; not autumn.  Metaphorically, however, it’s raining out there.  As the calendar moves into the official start of the autumn, markets on both sides of the border are facing the prospect of a correction – a drop of 10% or more from a previous peak.  The terminology is telling because it is really just another example of industrywide Bullshift.  Why is it a “correction” if markets go down 10%, but not if they go up by that amount?  Is the market unidirectional in its inability to properly calibrate valuations?  I digress…


There is a difference between knowing something is going to happen and being prepared for that eventuality.  I do not know what the future holds, but I remain prepared for the possibility of the pending correction to morph into a full-blown bear market (i.e. for the drop that just began to continue until the fall from the previous peak exceeds 20%).


Scouts have a motto to “be prepared”.  What about you?  Warren Buffett referenced the idea of preparedness in his 1982 letter to shareholders by coining what he calls the “Noah Principle”, which says that “predicting rain doesn’t count; building arks does”.  Back in the day, the rest of the world laughed at and mocked Noah.  He went about his business anyway.  These days, many advisors mock me for being worried about valuations and economic and political uncertainty.  I’ve nonetheless ‘built an ark’ for my clients, so to speak.  I’m no weatherman, but the storm surges on the U.S. Gulf Coast have already dropped massive amounts of water.  What if the rains continue and spread to the rest of the continent – or the rest of the world?  Wouldn’t it be useful to have an ark at a time like that?

Share on linkedin
Share on facebook
Share on twitter
Share on print
Share on email

Recent Posts

The information contained herein has been provided for information purposes only.  The information has been drawn from sources believed to be reliable.  Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment.  The information does not provide financial, legal, tax or investment advice.  Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.  This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document.  Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions.  Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances.  WAPW is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.