Earlier this week, I was fortunate to attend a gathering of executives and entrepreneurs at a Global Real Estate conference in New York City.
I met industry leaders with interesting ideas about how to achieve success as we move forward, but there was one thing that stood out: Even among the sharpest business minds in the world, there’s an underlying and pervasive anxiety and one that I relate to – it’s not so much a fear of missing out but, rather, a fear of being left behind.
This is a point that I want to explore in this post – that in our quest for relevance or status or unicorn-level success, we’re getting buried in clutter and babble, often jumping from idea to idea or grasping for solutions.
Although that can lead to major innovation, it can also be a significant barrier to success – and while this is always important, it’s even more so as we approach the precipice of a recession and wonder if it’s possible to come through it unscathed.
I say it’s entirely possible to come through better than ever – and you have a lot of control over how this pans out. Here’s my take on it.
Clear Out the Clutter
Looking back on the last couple of years of this blog, a consistent thread has been amazement at the total lack of reason and logic in every facet of investing. We’ve allowed ourselves to believe that the quickest, and possibly only, route to success is to create something out of next-to-nothing (yes, I’m looking at you, crypto and NFTs), gamify it and then let a handful of early investors proselytize to bigger fools.
My past professional experience as a trader has given me a high-risk tolerance, coupled with an emotional detachment from my trades, that enables me to dabble without getting bruised. But in times like these, many people – and especially those who may not have the emotional distance that benefits traders or those who have overleveraged crypto or other investments – may have a hard reckoning ahead. I never like to see that happen – I’d love for all to invest in the markets and do well – but the writing’s been on the wall.
If you’re a frequent reader of this blog (thank you!), then you know that when I’m deciding on investments, I always go into my decisions based on reading the tape: assessing historical data, gauging current trends, and envisioning what I believe future behaviors will be. Given this, I think crypto plays were alright for very short-term plays – and good for those who got in and out quickly and made some money. But for those who placed a whole lot of their financial faith in a palace built on shifting sands, it has certainly been much riskier.
I also ask myself this: Is there a simpler way to achieve the results I want? For example, instead of something as untethered and intangible as trading crypto, why not just trade actual currencies, if that’s of interest – particularly since crypto’s value is correlated to government fiat anyway?
And this is just one example among many that I could propose today but if you’ve been reading this blog for a while or you follow the markets, then you’re already well aware of what’s happening.
But here’s the good news – doing well during periods of inflation and even in a recession is far easier than you may realize.
Simplify Your Path to Success
It’s in our nature to be curious, to take risks, to be willing to fail – and that’s all great, to a point. But it’s too easy to get thrown off course by the shiny things that come our way and when we can’t cut through the clutter, we lose our best opportunities. The way I see it, we’ve gotten so caught up in our fear of missing out, our fear of staying relevant, that we jump at every potential opportunity presented to us.
And as a result, we’ve lost track of one of the most fundamental principles of success: Focus on the basics – including the things that you’re already great at – and do the very best you can and you’ll achieve success.
If you look at some of the most successful investors – yes, as I often do, I’ll point to Warren Buffett and Charlie Munger again here – as well as the most successful businesses (hello, Apple), the key has been sticking to core products, principles and services and making them the very best that they can be.
And as we’ve seen from Berkshire Hathaway and Apple and countless other examples, this is proven to be true, time after time.
Apple, it is said, was just weeks away from bankruptcy in 1997 when, in a last-ditch attempt to salvage itself, it acquired a different company that Steve Jobs had started after he’d resigned from Apple in 1985; Apple also brought him back to right the ship.
“one of the Jobs' first goals as CEO was to review the company's sprawling product line. What he found out was that Apple had been producing multiple versions of the same product to satisfy requests from retailers. For instance, the company was selling a dozen varied versions of the Macintosh computer.
Unable to explain why so many products were necessary, Jobs asked his team of top managers, ‘Which ones do I tell my friends to buy?’ When he didn't get a simple answer, Jobs got to work reducing the number of Apple products by 70 percent.”
Other sources go further
, saying that Jobs cut the product line from nearly 350 items to just 10. Whatever the numbers are, though, the significance of this is the same.
I bring this up because few people who have only known Apple over the last couple of decades could imagine that one of the world’s most valuable companies could have been as close to destruction as it was back then.
What saved it was getting back to its core offerings and making them the best in its markets. As Jobs was quoted as saying, “I’m as proud of many of the things we haven’t done as the things we have done. Innovation is saying no to a thousand things.”
I think we all need to be reminded of that from time to time, especially after several frenetic years.
Apple ad, c.1999, Gaslight Advertising Archives
So, what does that look like for you in terms of your professional aspirations and your financial goals? Where have you gotten off track?
Where are you overlooking or undervaluing the essentials of who you are, what you do, and what you aim to achieve?
In the end, the formula for success is the same now as it has ever been: It’s about understanding and leveraging your own “inner genius,” fostering relationships, communicating effectively, offering outstanding products and services, and building a great team. Stop getting caught up in everything swirling around you – and stop wasting time focusing energy and resources trying to overcome things that you can’t control – and, instead, make your basics the best they can be.
With that alone, you’re just about guaranteed to achieve a greater level of success.
And a Quick Look at Housing
With the current downturn in the markets (and short of a major rally), I think it’s almost inevitable that in about 60 or so days, we’ll see correlative impacts on residential real estate. Simply put, if there’s less money in your stock portfolio, there’s less money to invest in housing as well as the high level of correlation between housing and stocks. And, as I predicted, I don’t think we’ll see a major downturn, but there are signs of softening in some markets in terms of pricing and competition.
“The level of the active inventory is the housing market’s barometer, gauging the relative pressure of demand versus supply. When demand persistently outstrips supply, the stock of homes available for sale is depleted. Like dropping barometric pressure, plunging inventory usually foretells stormy conditions: faster price growth and faster sales. That’s exactly what the market has delivered for the past year and a half.
Now, after months of plummeting record lows, inventory finally began to rise in March, not just following seasonal trends but increasing enough to begin closing the gap with inventory levels of a year ago. It now looks likely that inventory will notch year-over-year growth sometime later in 2022, which hasn’t occurred since September 2019.”
If you’ve been aching to buy but have been outpriced or outnumbered over the last several years, this may be your opportunity to find a more attainable house. I’m not saying it’ll be easy, but the odds are going to be better than they’ve been for a while.
A Simple Challenge
Over the next several months, I challenge you to simplify your approach and find a few key areas that you can strengthen over the next several months – and I’ll try to do the same and will report back on my progress here.
I’m willing to bet that many of you will come through the current uncertainties stronger, wiser, and, in all the best ways, simpler, too.