“You don’t bank percentages”. This used to be a stock rejoinder in a previous workplace when (usually) some marketeer was talking about their brand’s year-on-year ten percent growth. I mused over this workplace cliche as I tried to come to terms with the hit my various investments took over last week, and decided that I actually did “bank percentages”- as it was much easier to think my funds had dropped by 6% as opposed to the actual cash that had vanished from the accounts.
The use of some other clichés also helped mollify the impact of the carnage, such as “I’m in it for the long term”, and “Our favourite holding period on stocks is “Forever””, thanking Warren Buffet for the latter one, if he actually said it. (Like a Shakespeare of the financial world, every pithy quote ever made about money seems to be attributed to the “Sage of Omaha”.)
Most of the Sunday papers offered solace too, with “Don’t panic Mr Mainwaring!” being the favoured tone of most commentators, although I did feel that there was an underlying, if not blatant, message of “Nobody knows anything”, when it came to trying to explain what had happened. I’m not sure if this was comforting or not, because surely professional analysts, economists and finance geeks should have a better idea than most of us as to what was going on? After all, when I visit the doctor with a well explained summary of a condition that ails me, almost the last thing I want to hear from him is “You know, I haven’t a bloody clue what’s going on. Have you got any ideas?” I might appreciate the honesty, but it’s not really going to help me.
There seemed to be a lot of discussion and dissection of the VIX index, but at that point my eyes began to glaze over. I realised I wasn’t going to be enlightened on the situation if one of the main tools used to try and explain it was just something else that I didn’t understand. Hopefully someone else did understand it, but is that really how the modern world works these days? When you think of some of the key pieces of engineering that we all rely on every day, how many of us can repair our car, never mind an iphone? When the central heating or boiler goes on the blink, do you reach for your toolbox? (The last two issues I’ve had with my boiler have been down to a faulty circuit board, something a spanner and screwdriver couldn’t really repair.) Even my cooker mocks me over my inability to use the functions it has at its disposal and let’s not even think about how we’d live without the main cultural, social, educational and emotional crutch of our lives, the Smart Telly. You can’t even walk over to it and give it a good wallop on the top of the cabinet when it malfunctions, because it doesn’t have a cabinet.
When I start to think like this, I can feel a bit of panic rising. It seems to me that in the “old days”, when there was a problem you called on a professional you trusted to fix it. A doctor, a mechanic, a joiner. And, when you called them in, you’d generally thought through the problem and maybe had a go at fixing it yourself before bringing in the hired help. These days, before the help’s even over the door, we’re standing there with Google and Youtube in our hand, ready with all of the questions and none of the answers.
I have a book on my reading list by Tom Nichols, “The Death of Expertise”, which laments this trend in society and worries over what it all means. I found out about that book through listening to the Sam Harris podcast, but increasingly listening to the Sam Harris podcast worries me. This guy is extremely smart, and interviews all sorts of other smart people, but often his live debates with fellow eggheads leave me feeling that they too are lost in the complexity of life today. Was there ever such a thing as an uncontested “fact”? You’d hardly think it, listening as yet another debate wanders off into the philosophical long grass of whether “a fact” is actually only an informed opinion built on certain rules and constructions, or vice versa. (The only “fact” that Harris seems to feel is truly incontestable is that Trump is an arse.)
Then, just as I was about to abandon all hope and embrace the “fact” that ignorance actually is bliss, along comes Monevator’s “Weekend Reading” with a fantastic summary of the many factors that might be behind last week’s market volatility. In plain English, and with no sense of panic whatsoever, cooling oils are poured over the fevered brow. And the Vix Index isn’t mentioned once.