My biggest learning in 2020
Fifteen non-anonymous FinTwit influencers across the globe reveal to Larissa Fernand the lesson they learned in a year like no other.
The year 2020 has been insanely tumultuous: Volatile trading sessions, the shortest bear market, a ferocious bull run, an unprecedented global lockdown, civil unrest, the drama of Brexit and a vituperative US presidential election.
Contributing to the apocalyptic atmosphere were bushfires, floods, a pandemic on a scale we could never have envisaged, a horrific Atlantic hurricane season, and fresh warnings on the impact of global warming on the Arctic.
Since the end of year lends itself to introspection, I reached out to 15 non-anonymous FinTwit influencers across the globe. They are typically amicable, sometimes entertaining and delightfully insightful.
I posed one question: What was your biggest learning of 2020?
Here are their responses, listed according to the length of the answer.
Assad Tannous, Asenna Capital
“With so many new entrants and fresh social media money pouring into the markets, 2020 has taught me that after 25 years of learning the fundamental basics of trading, all I really needed to learn was how to draw basic support/resistance lines and ask myself, what would the Facebook groups do and then hold for glory. A friend of mine is still trying to figure out how he lost 7 digits shorting the market during the greatest recession in economic history.
“On a more personal note, the COVID pandemic made me realise that as a trader I was always in a hurry to do nothing. 2020 was a wake-up call! When I look back, what I previously thought were mundane family tasks have now become priceless memories. I've now learnt to slow my life down, appreciate the simple things, to stop taking simple life moments for granted. Our time is way too precious to waste any other way.”
Morgan Housel, Collaborative Fund
“In December 2019, I remember informing you that the one thing I've learned in 2019—and actually have been reminded of for many years in a row—is how long things that look unsustainable can last. The US economy has been ‘due’ for a recession for many years. But we have been reminded that economies do not contract because they are overdue to do so; they fall when they're hit by an outside shock, and those shocks are always unpredictable.
“2020 has reiterated what I have always said: the biggest risk is always what no one is talking about. We spent years talking so much about the risk of interest rate hikes, trade wars, tax policy, and profit margins. Almost no one in the investment industry talked about a pandemic, but it was riskier than every other thing we spent a decade talking about combined.”
Ian Cassel, Micro-cap Investor
“In 2020, we had a bear market, a bull market, a recession, all-time highs (a bubble?). All in the same year. In bear markets, investors only care about the balance sheet, bull markets—the income statement, and bubbles—the very top of the income statement.
“At the start of the year, I was evaluating which companies could survive, and by the end of the year I was thinking ‘Is 20x sales cheap?’ (sarcasm). It feels like we’ve had 20 years of news headlines jammed into 12 months which had made us numb … to everything.
“The lesson I keep learning is that it doesn’t pay to try to predict what will happen next. Your game plan should always be to own the best opportunities you can find and hold them as long as you can.”
Emma Wall, Hargreaves Lansdown
“2020 has reinforced the idea that investment decisions made in haste are oft regretted. In fact, doing nothing may well prove to be the most profitable course of action. It is not always easy to look through the market noise and focus on the long term, but a panicked seller in March would have regretted their decision after just a couple of months.
“Before making any changes to your portfolio ask yourself: does this investment fit with my long-term goals? Has my conviction altered? Have the fundamentals changed, or just the price? Riding out the market rollercoaster is hard, but often the right thing to do.”
Christine Benz, Morningstar
“This crazy year has given me a bit more time for introspection. One thing I've been thinking and learning about, is making mindful allocations of time.
“We spend so much energy talking about how people should allocate their financial capital, but less on how to allocate time, even though it is finite and, therefore, more precious than financial capital. Ideally, we could all use this very peculiar period, when activities have slowed down and we can't do many things we love, to take stock of which activities we miss most and which we don't miss at all.”
Nick Bilodeau, Technology and Financial Marketing Leader
“The value of resilience. This year has been a challenging one to say the least. But when we look back, it’s astounding to see what we’ve all overcome together and the progress we’ve made since the onset of the pandemic. From businesses of all sizes and across industries quickly adapting to very unusual circumstances, to vaccines developed in record times and markets around the world posting strong recoveries, who thought we’d be where we are today just 9 months ago.”
Cathy Curtis, Financial adviser
“It has reinforced how important it is to be resilient. As a female financial adviser and a business owner, I have honed this mindset, which was truly tested this year. With the challenges came opportunity—to slow down, recommit to the things in life I care deeply about, and spend time by myself to think and plan. I also learned that I don't need a gym to stay fit! Just a lot of discipline and commitment to good health.”
Muthukrishnan Dhandapani, Investor
“Understanding the past does not provide us with the ability to predict the future. The pandemic at the start of the year, and the vaccination by the end of the year—both were completely unexpected. The stock market crash in March caught us unaware and so did the subsequent dramatic recovery.
“The future would always be full of surprises; both good and bad.”
Ben Carlson, Ritholtz Wealth Management
“This year has reinforced the need to stay humble when dealing with the financial markets. Even if you knew what the headlines were going to be heading into this year it still wouldn't have helped you predict what was going to happen in the markets.”
Raoul Pal, Global Macro Investor
“This year has taught me that the largest single influence on the entire investment world is the devaluation of fiat money by excessive monetary policy and almost nothing else matters. Currently, almost everything can be viewed within this framework.”
Brent Beshore, Permanent Equity
“It has made me appreciative of the sharpening of difficulty and the solace of rest. Both have a vital role to play in sanding down our rough edges and helping us grow into a better version of ourselves.”
The impactful one-liners …
“To live in the moment, have fun, not worry about what comes next.” - Sumaira Abidi, TV anchor
“2020 has taught me what the late Jack Bogle once said, “Nobody knows nothing”. - Nicholas Maggiulli, Ritholtz Wealth Management
“No one know anything; Twitter knows everything.” - Anupam Gupta, Investment research consultant
“Humans and markets are remarkably resilient.” - Allison Schrager, Economist and author
Wishing you a great 2021!