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The World Is Ending...
So we better stock up on toilet paper and sell all our stocks, right?
What a bizarre turn of events this week has lead to in the global markets.
LET ME HIT YOU WITH SOME FUN FACTS UP FRONT.
READ - Berkshire Hathaway's 2008 Shareholder letter - "Our decrease in net worth during 2008 was $11.5 billion." Ouch that must have hurt to write.
ALSO READ - Berkshire Hathaways 2009 Shareholder letter - "Our gain in net worth during 2009 was $21.8 billion."
THIS GUY GREW HIS WEALTH BY ALMOST DOUBLE ONE YEAR AFTER THE CRISIS. All the while smiling while he eats his daily cheeseburger and Coca Cola.
Keep that in perspective.
The Weekly THINK:
WHY I LOVE THESE MARKETS:
In every disruption there is a massive amount of noise and panic BUT those with cool heads and capital to deploy prevail. Just a reminder of history: a $1,000 investment made in 2009, would be worth more than $2,700 as of end of 2019. That's a total return of more than 175%.
The S&P 500 itself was up 227% during that period.
It's a reminder of the Buffett adage everyone quotes but no one follows, "be greedy when others are fearful and fearful when others are greedy." Panic-selling rarely benefits us.
In fact, one of my favorite activities is looking at who made billions during and after the 2008 downturn:
Warren Buffet bought $5B of Goldman Sachs and $3B of GE which in turn made him billions.
The Federal GOVERNMENT made $82B in 2010 by their bailouts of Wall Street... yes, they made billions
Carl Icahn followed Buffet's adage and in 2007 sold a couple of properties worth $1.3B at all time highs then turned around and bought distressed properties (some of which he previously owned and sold at the highs) making him, on average, a return of 4x.
That’s just to name a few.
You could add that KKR, Blackstone, Carlyle all became household names thanks to the 2008 panic induced buying opportunity. At EEC we plan on taking this same advantage.
Remember this too shall pass. Take care of yourself and your hard-earned money.
QOTW: “In God we trust; all others pay cash.” - From Berkshire Hathaway 2008 Shareholders letter.
Fascinating things happening in the world of hemp as construction materials. Did you know that 38% of global energy emission come from construction? Introducing hemp... this house is built from a majority of hemp materials and the house actually pulls CO2 from the air. It's made from reconstructed hemp hardware, hemp insulation, hemp bricks etc. Hemp construction materials supposedly are termite resistant, fireproof, breathable, 100% recyclable, prevent mold, store carbon, and insulate well. Maybe it won't be just the hipsters that use it going forward?
Question everything, as Lloyd Blankfein told us in the 2008 crisis:
"Real wealth is created in a downturn and collected in the rally."
Also I'm looking for a good way to donate to the Coronavirus first responders. I found this through the CDC if you find anything better please comment below.
Happy Questioning,
Codie Sanchez
Cannacurious? Want to get into the game... here's our contrarians' guide
IG: @codiesanchez
EEC: www.entourageeffectcapital.com
This article is presented for informational purposes only, is an opinion, and is not intended to recommend any investment, and is not an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Entourage Effect Capital, LLC or its affiliates. Any such solicitation of an offer to purchase an interest will be made by a definitive private placement memorandum or other offering document.