The End of the World Delayed Once Again

I'd like to share a story of one investor. A story of a man who invested $20,000 in October of 1974. He did this as he looked at the cover of the October 1974 Time Magazine issue which had a picture of President Gerald Ford trying to fight back inflation, recession and high oil prices. The same things we're fighting right now. Also, the stock market just finished two years of being down about 45%.

And during his lifetime he watched as NYC teetered on the verge of bankruptcy. He watched Three Mile Island nuclear reactor in Pennsylvania as it relayed a cloud of radioactive gas in the air and one hundred thousand local residents fled their homes. He watched Iran seize US hostages and an oil crisis in Iran where the price of oil skyrocketed. He watched Soviets invade Afghanistan, President Ronald Reagan get shot. He saw a Cold War during which movie after movie "entertained" him with the notion the world could end any second in a global thermonuclear war. He watched the US invade Granada, bomb Libya. He witnessed the stock market crash in 1987. He watched the news on the Iran Contra scandal. He saw the World Trade Center get bombed, The US Embassy Bombed, the Oklahoma Federal Office building bombed, USS Cole attacked and thousands of lives lost during 9/11. He feared Anthrax, Bird Flu, SARS, Aids, recessions, Enron, United Airlines going bankrupt, shuttle exploding. He saw an Iraq war times two and a President impeached. He watched devastating hurricanes wipe out an area as large as Great Britain. And during this time he watched the markets go down every so often as follows: -27%, -24%, -33.5%, -21%, -19% and -49%. One on average every 5 years.

And on March 25th, 2008, he woke up. And do you know what happened? The sun came up. He drank his Starbucks or Folgers coffee by Proctor and Gamble, he shaved with his Gillette Razor, brushed his teeth and rinsed with Listerine put on his Speed Stick from Colgate, flipped on his Sony TV and watched his Time Warner cable, ESPN to be exact by Disney and ate his breakfast a Pop Tart from Kellogg. He fed his cat some Friskies from Nestle and he got on his Harley Davidson and went to work using Exxon Mobil gasoline, where for lunch he couldn't decide between 7-up from Cadbury Schweppes or a Pepsi from Pepsi co. After work he went to the golf course and used his Titelist golf ball from Fortune Brands. After golf he had a Budweiser from Anheuser Busch and a Captain and Coke from Diageo and Coke. But before he went to bed, he didn’t want to forget all the bad stuff that had been going on in the world so he popped his Xanax from Pfizer. And there, laying on the table in front of him, was his recent statement from his investments. He had never looked at it. He opened his statement and found the following:

Initial Investment $20,000 October, 1974 Current Balance $1,033,380

This is what happened when he invested in the S&P 500 and reinvested all of the dividends and capital gains. This time it's not different. An investor's behavior is what matters most. Keep the faith.