timing the market versus loyalty to Bogle

I told Peggy in May that I was so pessimistic about stocks that it was all I could do to stay in the market. She said that maybe I shouldn’t, but my market philosophy came from John Bogle (the father of indexing), and I felt that I would be disloyal to him if I sold. So it is that I’ve received yet another lesson in the fact that, when I get screwed because I trusted an expert, the expert seldom if ever gets screwed with me.

So what did Bogle say that caused me to stay astride a horse that was running pell-mell toward a cliff? He demonstrated to my satisfaction that no market guru has ever demonstrated anything close to a consistent ability to time the market, and that effective market timing requires getting it right twice—once when you sell and again when you buy back (bull markets typically post their highest gains early on). I know he’s right, yet I don’t recall a single instance in which my own hunches were wrong. I have regretfully avoided buys because they seemed risky only to see them soar while my less volatile buys dropped. Now I’ve lost a third of our savings because I trusted John Bogle more than I did myself.

The trouble is that I don’t know if my hunches were a matter of intelligence or luck. Since I didn’t record them, I can’t even prove to myself that I was right as often as I think I was. It could be that I simply remember the times I lost money because I didn’t listen to my hunches while forgetting the times I made money because I listened to John Bogle. After all, no one remembers the thousands of times he drove to the supermarket safely; he only remembers the one time he had a wreck.

Having ignored my correct hunch to sell, let’s see how right I am over the coming months about my belief that now is the time to buy. Sure, the market looks risky, but if you wait until things have quieted down, you’ll miss out on its biggest gains.

Lullaby--by William Blake (1757-1827)

O for a voice like thunder, and a tongue
To drown the throat of war! - When the senses
Are shaken, and the soul is driven to madness,
Who can stand? When the souls of the oppressed
Fight in the troubled air that rages, who can stand?
When the whirlwind of fury comes from the
Throne of God, when the frowns of his countenance
Drive the nations together, who can stand?
When Sin claps his broad wings over the battle,
And sails rejoicing in the flood of Death;
When souls are torn to everlasting fire,
And fiends of Hell rejoice upon the slain,
O who can stand? O who hath caused this?
O who can answer at the throne of God?
The Kings and Nobles of the Land have done it!
Hear it not, Heaven, thy Ministers have done it!

the neurologist calls for another test, thoughts about dying

I had my MRI night before last. The neurologist’s office called at 8:00 this morning to say that he had ordered a CAT scan, and that the CAT scan people would call me. The CAT scan people called at 9:00, and said to get there ASAP, that they would work me in. This made me wonder what the dickens the MRI showed—or else didn’t show.

Based upon her terror of cancer (as opposed to her experience as a nurse) and her subsequent tendency to diagnose it at the drop of a hat, Peggy thinks I have bone cancer. She would not have shared this particular bit of information if we hadn’t been fighting at the time. Fortunately, Peggy’s fears are seldom my fears, so they don’t affect me except to make me sad that she has them.

Even if her direst prediction is right, death scares me mostly because she would have to carry on without me. Maybe I would be scared for me too if I really believed I was dying, but I think I would mostly worry about her and feel guilty that I was abandoning her. This is not because she couldn’t make it on her own (and even find satisfactions that she would not otherwise have known), but because it would be hard for her to do so. Our marriage has been through a lot during these 37 years, but it has generally gotten better since I stopped having affairs, and I would even go so far as to say that it’s pretty good now. This means that another thing that would make it hard to die would be knowing that I didn’t try as hard as I should have to deserve Peggy.