As a financial advisor in Houston, TX, I spend a considerable amount of time talking with clients about the price of oil. Everyone in Houston is keenly aware that the price of oil has plummeted over the last few months, and we’re already beginning to feel the effects in our local economy. Energy companies have already starting laying people off, turmoil overseas continues to threaten the global economy, and the stock market has yet to offer us any relief.
Last week, I met with a long time client of ours who I respect dearly. His name is Allan Stahl and he’s a Vietnam veteran who worked for Phillips 66 and Exxon Mobil throughout his career. Today, he lives in the hills of Tennessee with a unique life experience, bringing a certain clarity to the world that we live in today. During our meeting, I learned something new about Allan after discussing the current economy: He has kept a diary for the last several decades. Allan was kind enough to email me one of his journal entries from 1983, which may feel eerily familiar to Houstonians today:
Dear Heath: I found the following in a 1983 diary. It is interesting and brings to mind Ecclesiastes 1:9, “And there is no new thing under the sun.”
Journal Entry on February 22, 1983: “I’m reduced from 2 to 0.5 technicians. There’s a panic at Phillips 66! There may even be layoffs. Everything is going well, but these ever dropping oil prices and the crazy Middle East! Could oil prices drop enough to cause a depression?” – Allan Stahl
He makes a very wise point that I think we can all learn from. So often we think the trials that we face in life are unique, or we think today’s crisis is so hopeless that we’re simply doomed to enter into the next depression. In hindsight, we know that a long-term investor would have been handily rewarded through it all.
The power of a long term perspective is undeniable. But, in the moment, these concerns are very real. Today, I’m certain that market-driven anxieties are once again making their way into the diaries of 2016. I can’t help but wonder what lessons will be learned in the future from today’s diary. If you haven’t read it yet, I highly recommend you read Mike Minter’s last blog entitled, This Too Shall Pass. The article does a great job of bridging today’s market environment, with the time-tested principles of investing.
Lastly, I’d like to thank Allan for allowing us to share his words of wisdom with our clients. I’m sure that many of you have similar memories if you lived in the Houston area in the 1980s. If so, I’d love to hear your story, too. Please share them with me at email@example.com.