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  • Writer's pictureKevin Shuller, CFA, CFP

Buy the Turmoil

You don’t always know when other people are losing their minds. Luckily, CNBC exists. When the markets sneeze, CNBC puts up some of their finance porn programming. It’s usually called “Markets in Turmoil.” They did it last Thursday.

When the financial news channel is programming around the chaos, it’s a good sign that there is chaos. It’s also a good sign that you should ignore CNBC. Why do you even have a cable bundle anymore?

The interesting thing about Markets in Turmoil is that they have been an excellent contrary indicator. Though his data only goes back to 2010, Charlie Bilello looked at what happened if you bought stocks every time the market was in turmoil? The market was higher one year later 100% of the time.

Yes, this data only goes back 12 years. Those 12 years were quite bullish for stocks, generally speaking. This skews the data. A lot of the Markets in Turmoil specials were during the initial stages of COVID lockdown and market selloffs. From Feb 2020 – June 2020, these specials were almost nightly programming. Even so, those were great times to buy stocks.

If you can buy some stocks, the odds are in your favor. The important thing is not to panic sell. If you look around, there are more than enough people doing that already.

It’s ironic that one of the things that makes me bullish is the very program that tells me everyone is bearish.

Also, turn off CNBC. It isn’t helping you make good choices unless you do the opposite.

[1] This has been attributed to Napoleon, Eisenhower, and Eisenhower quoting Napoleon

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