With the DOW closing above 26,000 points for the first time in history and cryptocurrency Bitcoin’s meteoric rise, and subsequent fall, the financial markets are on an upswing. I sat down with several residents who follow the financial markets to ask them questions about how the current market compares to historical performances, and what big changes have changed the financial markets over the last decades.
John Quick (JQ): A career engineer, John started studying the financial markets while he was traveling abroad for work. John had a lot of time on his hands in the evenings, and thought educating himself about the market was a worthwhile way to spend those hours.
Doug Himebaugh (DH): After returning from Vietnam in the early 70s, Doug took an aptitude test that indicated he should pursue a career with numbers. Doug chose a career in finance, where he became an expert at mortgage-backed securities. Eventually, he managed the endowment fund for UCLA’s Foundation for five years before moving back to Kansas City and returning to banking.
Doris Olson (DO): Doris was working at Southwestern Bell when her supervisor told her about an option to purchase stock in the company through a payroll deduction. She had purchased one share before she took some time off work to say home with her children. It became a bit of a joke with her friends that she owned one share of stock. Then, the stock split and she suddenly had two shares.
Emerson Hartzler (EH): After a career in executive management, Emerson started the Pro-Bono Services division at Triune Financial Partners, LLC. He provided pro bono budgeting and financial advisory services to clients who could not otherwise afford access to a financial planner.
How long have you been following the markets?
JQ: Almost 60 years.
DH: 45 years.
DO: Several years.
EH: About 55 years. For the first 45 years I did it in an attempt to make financial decisions. I abandoned that foolish practice 10 years ago.
What are your go-to sources for financial news?
JQ: I read financial analysis by John Mauldin and his many international sources. I am also a life member of the American Association of Individual Investors (AAII).
DH: Bloomberg, Fidelity website, SEC websites, Fitch, S&P credit portal
DO: The Wall Street Journal and BottomLine Personal
EH: I regularly watch Fox business news, because they often provide news about what companies are doing to innovate, advances in technology, etc.; in short the “business news” as opposed to the news of “the markets.” When Fox News starts talking about the markets, I turn off the TV.
What change has had the single biggest impact on the financial markets in your lifetime?
JQ: (+) 1. Freer-markets around the world; less government intervention. Proven over and over again. Free people are the greatest resource we have to create wealth. (-) 2. Excessive public and private debt levels world-wide. (+/-) 3. Increasing life spans/decreasing birth rates.
DH: Quantitative analysis. “The quants” really changed the market as far as value trading. They were able to find value in various tranches where there hand not been value before. They caused a market disruption in the mid-2000s that led to increased technology, which paved the way for robo trades.
DO: The media has more to do with it now than anything. It’s (the financial markets) in the newspaper constantly, it’s on the internet, it’s on the TV. People can keep up better and faster than they have ever been able to before.
EH: Immediate access to information. Publicly traded companies are required to produce extensive qualitative information, and that information is available to everyone at virtually the same instant. Qualitative information is less regulated, but available nonetheless in the same timely manner.
How would you categorize today’s market?
JQ: Fascinating – unprecedented. Human psychology at work.
DH: Compared to what? Compared to 9 years ago: stable. Compared to 20 years ago: similar. Compared to 90 years ago: very similar.
DO: I can’t believe the market. It’s going up and down every day, but it’s very high.
Which investors do better – those with a better understanding of the market/intelligence, or those with access to better information?
JQ: Neither. The market is too complex for that. Smart investors: 1. Invest in themselves (education), 2. Build a career. 3. Get/stay out of debt (live within their means) 4. Save/invest in a broad market mutual fund(s)
DO: It’s a combination. You have to understand as much as you possibly can on it, but you also have to keep very, very informed, because things change all the time.
EH: Knowledge is power. You don’t have to be a Certified Investment Analyst to be a successful investor, but it is good to have enough knowledge so you have realistic expectations for your investment results over both the short term and long term.
Who is the GOAT (greatest of all time) when it comes to analyzing/participating in the financial markets?
JQ: T. Rowe Price, Warren Buffett, Sam Walton, and many others nobody has ever heard of.
DH: A lot would say Warren Buffett. I don’t know that he’s any better than others. There is no one, great investment guru.
DO: Everybody knows Buffett.
EH: Warren Buffett. He has an incredibly long-term planning horizon, which is a lesson for every investor.
In your opinion is there something quintessentially American about participating in financial markets, or is it global?
DH: It’s more global now than it used to be. Twenty five years ago, a handful of people could have told you what the Brazilian or European markets were; now it’s extremely global. There are not a lot of hoops to go through to invest in Chinese currency or Russian currency. You can do it from your living room.
EH: We live in a time of a global economy, so there is probably nothing particularly unique about Americans when it comes to investing. There has never been a better time for the “average person” to be an investor!
What song title accurately sums up the financial markets?
JQ: Up, Up and Away
DH: Catch Us If You Can
EH: The lyric, “Fools rush in where wise men fear to tread,” might be applicable to investors.
What is the best movie/book about finance in popular culture?
JQ: Dave Ramsey, Total Money Makeover and others; everything by Michael Lewis; Warren Buffett biographies; Thomas J. Stanley, The Millionaire Next Door
DH: Red Notice: A True Story of High Finance, Murder and One Man’s Fight for Justice by Bill Browder