Happy Friday!
I wrote this week about the dangers of concentrated holdings. Because tell me if this sounds familiar…
You have a client with a few million in investible assets. Roughly 95% of it is in one stock that was either handed down to them from parents or they don’t want to pay taxes on a huge home run or whatever the reason. I see this about once a quarter. Guessing you see it more than I.
This is a big problem, and no amount of logic can get them to sell/trim the position. Want to know why? Because we have two brains – the logical one and the emotional one. The decision to hold that stock is almost always made by the emotional brain, so showing data is like using penicillin to treat a viral infection.
You almost have to scare them a little to shake them out of the fiction where they think that stock loves them back. Sort of like that show on TV years ago called Cheaters. It was a top tier show that followed people around who were suspected of cheating on a partner, and then Joey Greco (the host of the show who was also stabbed during filming of one of the episodes (although some claim it was staged)) would show the video surveillance to the “victim.” You can imagine what happened after that.
That’s what my piece this week will hopefully do for your clients in a similar position – scare them a little. Just try not to get stabbed.
Ok let’s move on….
Quiet week in markets. Not so quiet outside of markets, but since I try to keep commentary to markets and economics, I’m not going to touch the other stuff happening right now.
Since it’s quiet, it’s a perfect time for me to lay out a conspiracy theory of mine that began roughly 12 seconds after Pfizer first announced their vaccine back in November (technically this has nothing to do with markets or economics but whatever). It goes something like this…
I have an irrational fear of needles. It’s stupid and yes I’m a total wimp, but I have tried everything short of heroin to overcome it. Even in my mid 40s, they still freak me out and cause my entire nervous system to decouple.
But it’s also why I’ve been able to deduct the following:
Fact #1: The media has zero interest in watching the biggest story in decades go away anytime soon.
Fact #2: More vaccinations will likely make the biggest story in decades go away very soon.
Add these two together, and…
Fact #3: Although the media likes to report on stories of why people aren’t getting vaccinated to upset those that have been vaccinated, the media doesn’t actually want people to get vaccinated.
Allow me to submit evidence to support this claim:
- Their use of the word “jabs.” The word alone implies something scary and painful (just ask Joey Greco). There is zero logic in using this word over the plethora of synonyms that imply less pain and stress like “doses” or “vaccinations” etc.
- There are no fewer than 7 pics of people getting a needle jammed in their arm in every article in print.
- I don’t watch the news, but I assume they are showing videos of people getting needles jammed in their arm during every vignette on why people aren’t getting vaccinated.
Tactics like these work really well because trypanophobia, or fear of needles, is a big thing. It’s estimated that it affects up to 25% of adults, and may lead 16% of people in the U.S. to skip vaccinations (not just COVID vaccinations but other stuff like polio and MMR).
Meaning, I may be a wimp but there are a lot of other wimps out there who would rather risk cancer and other scary stuff than getting blood drawn. Even seeing pics of needles can cause extreme and uncontrollable reactions like palpitations and panic attacks in people who hate needles.
There is zero chance the media is blind to this reality. They have to be using trypanophobia to keep 25% of the country on the sidelines (coincidentally close to the 70% herd immunity threshold). If I were Biden, I would have issued an executive order banning this type of reporting back in January. It’s way cheaper and less contentious that forcing people to get vaccinated. I feel like this alone would have pushed immunization rates north of 90% by June.
Anyway, I doubt I am the first person to call out the media on this one, but I just find it funny how blatant they are about it. Their refusal to change only confirms this theory even more.
Enjoy the weekend…
Mike on Markets 