Rejecting Waco Market Mavens

I recently watched the television miniseries “Waco,” which was a dramatized exploration of the 51-day standoff that took place in 1993 between the FBI, ATF and the “Branch Davidians,” a religious cult lead by the messianic and self-proclaimed “Lamb of God,” David Koresh. I highly recommend this show, as it was an intensely interesting examination of what happens when very bad delusory ideas collide with incompetent and overreaching government use of force.

The way I see this sad episode in American history is that both sides of this conflict were at serious fault, and the result was bad for the Branch Davidians, the government and, ultimately, every American. Indeed, in the follow-up series, “Waco: The Aftermath,” (which I also recommend) we learn how the events at the Branch Davidian compound were the genesis of the horror that was the Oklahoma City bombing by Timothy McVeigh.

Watching the “Waco” series and the fervent and emphatic end of times prophecies that David Koresh preached reminded me of many of the wild, hyperbolic and fear-focused marketing prognostications in my own industry, the financial newsletter/advice business. You see, when you want someone to buy what you are selling, one very good way to do this is to aggressively scare them into action.

You know the promotions I’m talking about. “The End of America” by one of my rival publishers is perhaps the best known example of this, but there are many others. I call these promos, and those who advocate for them, doom-and-gloom merchants, but I think a better term for them is “Waco market mavens.”

These Waco market mavens want to convince you that the world is about to end, and that you are going to lose all of your money — and that the only thing that can save you from financial Armageddon is to cough up a couple of hundred dollars a year for their publication.

Ok, before we go on, I understand the appeal of such dire predictions. I mean, doesn’t everyone fear an end-of-the-world scenario where civilization collapses, money is no longer of any use and people resort to pillaging others and eating one another’s flesh to survive? This is the ultimate fear, and it is why so many books, films and TV series are created to dramatize this kind of dystopian world. The best of this genre from a literary standpoint is Cormac McCarthy’s “The Road.”

Yet, while a dramatization of these fears might be good subject matter for fiction, it is absolutely NOT a way to invest in the equity markets.

Fear of loss might be a way to get you to buy someone’s advice, but if that advice is for you not to invest in the greatest wealth-building mechanism ever devised, then you are simply a sucker that’s fallen prey to bad ideas. Another way to put it might be you’ve been seduced by the likes of a financial David Koresh.

Think about it this: What end times prognostication, or what doom-and-gloom financial prediction, has ever come to pass?

The answer is… none.

We currently live in the most prosperous, safest and healthiest time the world has ever seen. And if you don’t believe me, check out the work of Harvard psychologist Steven Pinker in his seminal book, “Enlightenment Now.” As for things in the financial markets, stocks now are quicky approaching all-time highs on the S&P 500 Index.

Perhaps a visual here will make my point even more forcefully. Take a look at the S&P 500 since 1950. As you can see, the arc of history bends upward, and no matter how closely you look, I defy you to locate Armageddon on this chart.

Now, is this to say that markets always go higher? Of course not. Bear markets are real, and, in my nearly 30 years in this business, there have been some very destructive periods of market selling. This reality must be respected, but it also must be accepted as part of the cost of doing business.

Yes, markets, to be commanded, must be obeyed. In fact, “Markets, To Be Commanded, Must Be Obeyed,” is the actual title of one of my presentations at the upcoming FreedomFest conference next month in Memphis, Tennessee. So I don’t want you to think that I’m bullish all the time. That would be as equally bad an error as the one made by the doom-and-gloom Waco market mavens, albeit in the opposite direction.

Yet, what I want you to take away from my thoughts here is that listening to the merchants of fear is a prescription for paralysis — not just in terms of your money, but in terms of your life and your happiness.

If you want to live a wealthy life, not just fiscally but also psychologically, emotionally and intellectually, I behoove you to reject the Waco market mavens and embrace the reality of a benevolent universe. Much more happiness, truth, beauty, wisdom and wealth will come to you that way.

Dylan’s Little Red Bike

Little red wagon, little red bike

I ain’t no monkey but I know what I like

I like the way you love me strong and slow

I’m taking you with me honey baby, when I go…

— Bob Dylan, “Buckets of Rain”

I never had a little red wagon, but I did have multiple little bikes (red, silver, black, etc.) when I was a youth. Indeed, some of my fondest childhood memories are of going out and exploring the world on my little bike. Alas, those memories are multiple decades away, and the little bikes have been replaced with little supercars. Yet, the thrill and excitement of discovering the world remains with me, and I think that’s an important key to happiness as we mature. So, whenever you’re feeling nostalgic, remember the thrill of your own little red bike. It will take you to places you yearn to be.

Finally, if you want to hear a brilliant version of this classic Dylan song, check out this rendition by singer/songwriter/guitarist Toni Lindgren. And if you are so inclined, pop me an email and thank me for the smiles.

In the name of the best within us,

Jim Woods