The Time is Now
Eric Franklin
May 16, 2022
If—
BY RUDYARD KIPLING
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’
If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
I’ve always loved “If–,” by Rudyard Kipling, and re-read it whenever times seem challenging.
Of course, markets are in the midst of some challenges right now, so we feel that it’s a good time to update you on our thinking about what you should do. Year to date, the S&P 500 is off by 16%. Our active approaches, both Ariel (Growth) and Caliban (Long-Short), have fallen significantly more (thanks to large positions in growth investments). Crypto related investments are down further, thanks to recent regulator comments and the implosion of Luna and Terra. Basically, the riskier the asset type, the more it is down.
It’s important for me to mention that our clients—wire to wire—are incredible (really good looking, gracious, etc,). While I know paper losses are traumatic while they’re happening, not a single one of you has panicked or tried to pull the ripcord. From what I hear out of other advisors, this is rare. We know it’s tempting to take your ball and sit on the sidelines, but we believe that a combination of mental fortitude and a willingness to go on offense, will yield outsized results.
I’d like to talk for a moment about what we’re doing here at Prospero Wealth. After that, I want to propose some opportunities for you.
Many of you have heard me say this, but I think it bears repeating: “You have to be wired backwards to make money in the stock market.” If you only buy when business is good, confidence is high, and money is being plowed into markets, you are, by definition, overpaying for that privilege. The inverse is also true, if you can remain calm and collected—while everyone is losing their collective cool—that is where you will make significant returns. We believe now is that time.
And yet, markets may drop further from here. We might be nowhere near the bottom; or, conversely, we could be hours away from a rally off of the bottom. While we don’t know where the ultimate rebound will come from, or when it will happen, we know that the recovery generally comes before people are ready for it, and buying the companies who own the future, many of which are currently off by 60-80%, will eventually yield significant rewards. The way we see it, the proverbial “baby has been thrown out with bathwater”...again; and we are actively positioning ourselves to take advantage of it.
Those of you who were with us during the Covid Collapse, saw this strategy work to great effect. The most trading we ever had in our active models was in March and April of 2019, when we aggressively reallocated to our highest conviction stocks. That worked pretty well back then and we expect it will do so again.
Your job, as clients, or prospective clients, is to keep a level head and evaluate your current opportunities. Here are a few specific things we think are worthwhile responses to the present environment:
Shifting more active: If you have money indexed and money actively placed, we think now is the time to consider shifting more towards active. We see a larger rebound at some point in Growth stocks than in the S&P 500, for example.
Roth conversions: If you’ve been waiting to do a Roth conversion, now is a great time to do one. Pay lower taxes on the conversion and take the eventual upside in your Roth when markets recover.
Push your chips in. Allocate your cash sitting on the sidelines: We tell people this every correction. Few ever do it, and yet, after the eventual rally, everyone asks us to tell them when there’s another opportunity. So here it is. Here is your opportunity. The time is now. The stock market moves up and to the right over long periods of time. Buying anywhere along a steep decline has never (ever ever ever ever) been a bad idea. We all know this and yet we all hesitate hoping to find a lower entry or a more clear buy signal.
Let us know if your portfolios are too volatile: At Prospero Wealth, we construct portfolios for our clients that are a mix of broadly diversified approaches (smart beta and indexed approaches) and active approaches. If you are having difficulty stomaching temporary paper losses like what we’re all sitting on right now, let us know and we can reduce risk as we see things recover. We don’t want to take risk off your portfolios in the middle of a market event but we’re happy to dial things in for your own future sanity.
Thank you for being a part of Prospero Wealth. We appreciate you and the faith you have placed in us. Please reach out if you want to chat about your concerns and/or opportunities.
If—
BY RUDYARD KIPLING
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’
If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
I’ve always loved “If–,” by Rudyard Kipling, and re-read it whenever times seem challenging.
Of course, markets are in the midst of some challenges right now, so we feel that it’s a good time to update you on our thinking about what you should do. Year to date, the S&P 500 is off by 16%. Our active approaches, both Ariel (Growth) and Caliban (Long-Short), have fallen significantly more (thanks to large positions in growth investments). Crypto related investments are down further, thanks to recent regulator comments and the implosion of Luna and Terra. Basically, the riskier the asset type, the more it is down.
It’s important for me to mention that our clients—wire to wire—are incredible (really good looking, gracious, etc,). While I know paper losses are traumatic while they’re happening, not a single one of you has panicked or tried to pull the ripcord. From what I hear out of other advisors, this is rare. We know it’s tempting to take your ball and sit on the sidelines, but we believe that a combination of mental fortitude and a willingness to go on offense, will yield outsized results.
I’d like to talk for a moment about what we’re doing here at Prospero Wealth. After that, I want to propose some opportunities for you.
Many of you have heard me say this, but I think it bears repeating: “You have to be wired backwards to make money in the stock market.” If you only buy when business is good, confidence is high, and money is being plowed into markets, you are, by definition, overpaying for that privilege. The inverse is also true, if you can remain calm and collected—while everyone is losing their collective cool—that is where you will make significant returns. We believe now is that time.
And yet, markets may drop further from here. We might be nowhere near the bottom; or, conversely, we could be hours away from a rally off of the bottom. While we don’t know where the ultimate rebound will come from, or when it will happen, we know that the recovery generally comes before people are ready for it, and buying the companies who own the future, many of which are currently off by 60-80%, will eventually yield significant rewards. The way we see it, the proverbial “baby has been thrown out with bathwater”...again; and we are actively positioning ourselves to take advantage of it.
Those of you who were with us during the Covid Collapse, saw this strategy work to great effect. The most trading we ever had in our active models was in March and April of 2019, when we aggressively reallocated to our highest conviction stocks. That worked pretty well back then and we expect it will do so again.
Your job, as clients, or prospective clients, is to keep a level head and evaluate your current opportunities. Here are a few specific things we think are worthwhile responses to the present environment:
Shifting more active: If you have money indexed and money actively placed, we think now is the time to consider shifting more towards active. We see a larger rebound at some point in Growth stocks than in the S&P 500, for example.
Roth conversions: If you’ve been waiting to do a Roth conversion, now is a great time to do one. Pay lower taxes on the conversion and take the eventual upside in your Roth when markets recover.
Push your chips in. Allocate your cash sitting on the sidelines: We tell people this every correction. Few ever do it, and yet, after the eventual rally, everyone asks us to tell them when there’s another opportunity. So here it is. Here is your opportunity. The time is now. The stock market moves up and to the right over long periods of time. Buying anywhere along a steep decline has never (ever ever ever ever) been a bad idea. We all know this and yet we all hesitate hoping to find a lower entry or a more clear buy signal.
Let us know if your portfolios are too volatile: At Prospero Wealth, we construct portfolios for our clients that are a mix of broadly diversified approaches (smart beta and indexed approaches) and active approaches. If you are having difficulty stomaching temporary paper losses like what we’re all sitting on right now, let us know and we can reduce risk as we see things recover. We don’t want to take risk off your portfolios in the middle of a market event but we’re happy to dial things in for your own future sanity.
Thank you for being a part of Prospero Wealth. We appreciate you and the faith you have placed in us. Please reach out if you want to chat about your concerns and/or opportunities.
If—
BY RUDYARD KIPLING
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’
If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
I’ve always loved “If–,” by Rudyard Kipling, and re-read it whenever times seem challenging.
Of course, markets are in the midst of some challenges right now, so we feel that it’s a good time to update you on our thinking about what you should do. Year to date, the S&P 500 is off by 16%. Our active approaches, both Ariel (Growth) and Caliban (Long-Short), have fallen significantly more (thanks to large positions in growth investments). Crypto related investments are down further, thanks to recent regulator comments and the implosion of Luna and Terra. Basically, the riskier the asset type, the more it is down.
It’s important for me to mention that our clients—wire to wire—are incredible (really good looking, gracious, etc,). While I know paper losses are traumatic while they’re happening, not a single one of you has panicked or tried to pull the ripcord. From what I hear out of other advisors, this is rare. We know it’s tempting to take your ball and sit on the sidelines, but we believe that a combination of mental fortitude and a willingness to go on offense, will yield outsized results.
I’d like to talk for a moment about what we’re doing here at Prospero Wealth. After that, I want to propose some opportunities for you.
Many of you have heard me say this, but I think it bears repeating: “You have to be wired backwards to make money in the stock market.” If you only buy when business is good, confidence is high, and money is being plowed into markets, you are, by definition, overpaying for that privilege. The inverse is also true, if you can remain calm and collected—while everyone is losing their collective cool—that is where you will make significant returns. We believe now is that time.
And yet, markets may drop further from here. We might be nowhere near the bottom; or, conversely, we could be hours away from a rally off of the bottom. While we don’t know where the ultimate rebound will come from, or when it will happen, we know that the recovery generally comes before people are ready for it, and buying the companies who own the future, many of which are currently off by 60-80%, will eventually yield significant rewards. The way we see it, the proverbial “baby has been thrown out with bathwater”...again; and we are actively positioning ourselves to take advantage of it.
Those of you who were with us during the Covid Collapse, saw this strategy work to great effect. The most trading we ever had in our active models was in March and April of 2019, when we aggressively reallocated to our highest conviction stocks. That worked pretty well back then and we expect it will do so again.
Your job, as clients, or prospective clients, is to keep a level head and evaluate your current opportunities. Here are a few specific things we think are worthwhile responses to the present environment:
Shifting more active: If you have money indexed and money actively placed, we think now is the time to consider shifting more towards active. We see a larger rebound at some point in Growth stocks than in the S&P 500, for example.
Roth conversions: If you’ve been waiting to do a Roth conversion, now is a great time to do one. Pay lower taxes on the conversion and take the eventual upside in your Roth when markets recover.
Push your chips in. Allocate your cash sitting on the sidelines: We tell people this every correction. Few ever do it, and yet, after the eventual rally, everyone asks us to tell them when there’s another opportunity. So here it is. Here is your opportunity. The time is now. The stock market moves up and to the right over long periods of time. Buying anywhere along a steep decline has never (ever ever ever ever) been a bad idea. We all know this and yet we all hesitate hoping to find a lower entry or a more clear buy signal.
Let us know if your portfolios are too volatile: At Prospero Wealth, we construct portfolios for our clients that are a mix of broadly diversified approaches (smart beta and indexed approaches) and active approaches. If you are having difficulty stomaching temporary paper losses like what we’re all sitting on right now, let us know and we can reduce risk as we see things recover. We don’t want to take risk off your portfolios in the middle of a market event but we’re happy to dial things in for your own future sanity.
Thank you for being a part of Prospero Wealth. We appreciate you and the faith you have placed in us. Please reach out if you want to chat about your concerns and/or opportunities.
7724 35th Ave NE #15170
Seattle, WA 98115-9955
(971) 716-1991
hello@prosperowealth.com
Prospero Wealth, LLC (“PW”) is a registered investment advisor offering advisory services in the States of Washington, Oregon, and California and in other jurisdictions where exempted. We are conditionally registered in Texas.
© Prospero Wealth 2024. All rights reserved.
7724 35th Ave NE #15170
Seattle, WA 98115-9955
(971) 716-1991
hello@prosperowealth.com
Prospero Wealth, LLC (“PW”) is a registered investment advisor offering advisory services in the States of Washington, Oregon, and California and in other jurisdictions where exempted. We are conditionally registered in Texas.
© Prospero Wealth 2024. All rights reserved.
7724 35th Ave NE #15170
Seattle, WA 98115-9955
(971) 716-1991
hello@prosperowealth.com
Prospero Wealth, LLC (“PW”) is a registered investment advisor offering advisory services in the states of Washington, Oregon, California, and in other jurisdictions where exempted.
© Prospero Wealth 2024. All rights reserved.