2026: Off to an Unsteady Start!
As we’ve moved into 2026, the investment landscape has shifted, at least temporarily. Things seemed steady to somewhat positive through February, but March brought attacks on Iran and fears of higher gas prices, inflation, costs of war and a slowing economy. Markets fell. We’ll see if any or all of these concerns stay, grow or reverse. Especially of late, major news stories can quickly change the tone and direction of the markets, in either direction. Times like these require a calm and long-term focus, otherwise it would be very easy to get whipsawed.
Is Buffett Norwegian?!
The Winter Olympics recently concluded and once again Norway, the 121st largest country by population, came in 1st in the medal count. How can this be?! Some believe they have an Olympics ‘machine’ up there in Norge. Instead, their approach is surprisingly simple: they promote youth athletics incorporating fun, no scorekeeping, teamwork and trying various sports before specializing. Even once promising athletes focus on a singular sport to prepare for world competition, coaches stress NOT overtraining and keeping their approach simple and sustainable, establishing consistency and achievement over time.
Warren Buffett has long been considered the gold standard investor. A big part of his success is based on his unique approach to investing, which isn’t terribly complicated but is hard to adhere to. Human nature wants to over-do things to win but often ‘under-doing’ things (while having an excellent overall approach and strategy) is more effective. It’s a conundrum that people often don’t ideally navigate. Buffett zigs when others zag and is fully independent, doing things his way. He is never in a hurry. Buffett prefers doing less to more, because he’s confident in his plan and approach.
When I think of the Norwegian dominance in recent winter Olympics, it reminds of the Buffett investment approach: create a good plan, stick to it, be moderate, calm, thoughtful, wise and have fun. It’s like Chinese or Greek parables – simple yet powerful concepts and wisdom – human truths — applied to modern elements such as world-class sports and investments. Most of all, it works!
Was Nobody On Epstein Island?
The Epstein Files seem to have a life(s) of their own. The administration continues to hesitate in releasing all the unredacted information, which raises suspicions to many, as it should. Instead, the information comes out in unpredictable waves.
During these releases an insultingly similar pattern occurs: the named people (often well-known) who have long-denied spending time with Epstein change their tune when pictures or e-mails/texts including them come to light. They then say they regret every moment spent with him, they knew nothing of his illegal activities and, when they did find out, they completely cut ties. Often times further released communications indicate they didn’t.
Most everyone also seems to claim they never went to his island. If they were all telling the actual truth, then his island retreat wouldn’t have hosted anyone. All their new-found fake outrage seems formulaic, lawyer-encouraged and disingenuous.
How this applies to investing is that it’s clearly human nature to conceal and deny negative news in the public eye. The rich and powerful are not any better at this and could arguably be worse by having a sense of entitlement. Thus, when you hear from company leaders that ‘all is well’ in the face of concerns, be at least somewhat skeptical. Look for evidence that they are being truly honest. Look for a track record of being up-front and reliable. Comments that are balanced and moderate are more believable than over the top confidence that nothing could be a problem or issue.
Readers know I’ve been concerned over the past year or two about the non-transparent nature and possible problems in the private credit market. Private credit usually offers notably higher interest rates than publicly-traded corporate bonds, so there has to be a reason and likely it means adding risk. If a CEO in this field says ‘all is great’, be concerned. All can’t be great in a stressed market. A calm, measured stance would be more believable.
Gold – Safety or Speculation…or Both!
Gold does little but sit there and look shiny. What it’s worth from day to day and year to year depends on what the collective investors believe it’s worth based compared to other investments that actually generate tangible returns such as a dividend or interest.
Thus, I believe gold’s value is inefficient. It’s not based on a formula or objective criteria. Instead, it reflects the collective investors’ fears and aspirations…and speculations. As a result, its price can overshoot on the bottom side AND the top side. Beware.
Today gold not only is serving as its typical safe-haven for the fearful and the conservative investor, but now is also serving as an investment for speculators and has become a ‘hot’ asset. I’m sure at some point the ‘fast money’ will move on to the next speculative theme. When it does, be ready to see a drop in gold’s value.
Gambling vs. Investing
Historically, gambling has been quite limited in the U.S. Now, thanks to a Supreme Court decision a few years ago, gambling seems to be everywhere.
This portends some bad outcomes. Las Vegas isn’t as glitzy and overdone as it is without the house winning the majority of the time. You can rest assured your odds of winning in the gambling world are south of 50%, perhaps much less so.
So why do so many gamble? Part of it is because it’s considered ‘entertainment’ and, if done within an affordable amount, doesn’t seem to be problematic. However, when gambling becomes an addiction or if the gambler has strong belief that they will win despite the odds, then financial dangers lurk…perhaps big dangers.
Investing, in its highest and best form, differs significantly from gambling. It’s a long-term commitment to buying and holding shares of good companies that grow over time. On the other end of the investor spectrum are the speculators and they look a lot like gamblers, often with similar outcomes. In theory, all investors can win with time; all gamblers cannot.
BrianWeisman, CFA,CPA,CFP,CMA
(734)6651454
Another Great Year – Where Do We Go From Here?