Just found this note I wrote to myself on the plane ride back from the Insite Advisor Conference in Ft’ Lauderdale three weeks ago.
Michael Lewis, the Liar’s Poker guy, spoke at the conference and his presentation was called “What Happened?” (more or less). He went through the events leading to the meltdown, CDOs, leverage, hubris and everything else as though he wrote it for one of his books. Bottom line – there were some really big Wall Street geniuses who were allowed to run amok. Scary, obvious in hindsight and proof that greed drives bubbles.
Another session had three advisor/trainer types talking about how to restore client trust. They made a lot of sense with strategies of simply talking to client saying “I am still here for you.”
Then they starting in with asset allocation does not work and long-term investing is still the way to go. They scoffed at timing. (Their timing at realizing asset allocation bombed was pretty bad, wasn’t it?)
Of course, I was seething but it was their show not mine. They can figure out how a 20-year time horizon in the stock market produced a return of zero. That’s zero. A bagel. Goose egg. Squat.
T-bills outperformed, I think you get my drift. But then again, that is a secular bear market and asset allocators were out or greatly underweighted in long-term portfolios.
They went on to say that clients need advisors more than ever now and I totally agree. But not the guys that were blind to what was happening as they clung to old ways of doing business – ways that worked in secular bull markets.
But now that we are at the back end of a bear, at least a cyclical bear, buy and hold is going to work again. Just when these knuckleheads have capitulated to the idea that it is dead.
