To Survive A Bear Attack, Just Play Dead

I’ve spent a ton of time hiking and camping in wilderness, and that means being in bear country.  More specifically, I’ve spent a lot of time in grizzly bear territory which is just a few states in the lower 48, Alaska, and Canada.

To go through grizzly country safely you need to know what to do if you have the unfortunate luck of encountering one of these beasts.  On my run the other day it struck me how the rules to handling a grizzly encounter are similar in many ways to the rules to handle another kind of bear, a bear market.  More accurately a turbulent and crashing market like we have now.

Here are some of the similarities:

Grizzly Bear encounter Rule #1 – Don’t make fast or jerky movements:  In other worlds, don’t act on your emotions.  Every cell in your body will be crying for you to run, but it’s the worse thing to do.  Grizzlies can run 35 mph, Ussain Bolt can’t, and neither can you.  Running will likely trigger it to chase.  Then it’s game over. 

Turbulent Market Rule #1 – Don’t make fast or impulsive moves:  You can’t let emotions guide your decisions, that’s just short term thinking.  You’re going to see your balances go down, maybe further still.  Then they might go up big two days in a row.  Is it over?  STOP.  You don’t know.  Take it from this guy who just wrote a piece in the New York Times about it – throw your emotions out.

“You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy.” – Charlie Munger

Grizzly Bear encounter Rule #2 – Stand your ground:  Just stand there, don’t look him in the eyes.  Put your arms up slowly to look bigger.  Maybe slowly walk backwards, always facing the bear.

Turbulent Market Rule #2 – Stand your ground.  Stick to your overall plan:  You do have a plan, correct?  If not it might be a bit late for that.  But stand still and stick to it.  Maybe you can put your arms up in frustration (haha), but that’s the limit of your emotion.  

Grizzly Bear encounter Rule #3 – Play dead:  If the bear comes at you, lie down and play dead.  Protect your neck and head as much as you can.  Wait for it to end.  Don’t fight back.  

Turbulent Market Rule #3 – Play dead:  Do nothing.  Make no moves, ignore it, just wait for it to end.  It will eventually end.

My “do nothing” strategy has many supporters.  The Business Insider article says “If you have the means, it might even be a good time to buy while prices are low.”

So let’s address that.  When I say I’m doing nothing that’s technically not true.  An accurate statement would be “I’m doing nothing different than I normally do”. 

I still work part time at my W2 job and that means I still get bi-weekly paychecks.  And I still max out my TSP (it’s a 401k for government workers).  I always do that, it’s like breathing.

To invest the full $19,500 allowed in 2020 I’m putting $750 into my account every paycheck where it goes into a life-cycle fund that’s about 70% stocks and 30% bonds. 

So I am buying stocks through this crisis.  This is called dollar cost averaging, which means I’m buying more shares when prices are lower and fewer shares when prices are higher.

 

Asset Allocation

You might be saying “isn’t your asset allocation out of whack now?”. 

Yes, I’m way less in equities now and my bond and cash percentages are higher.  I will tweak it back to where I want it, but not just yet. 

We’re having days when the market goes up 11% one day, then down 6% the next.  It’s no use trying to target a specific allocation when things are this turbulent.  It will likely be out of whack again in a day or two. 

The government isn’t done throwing money around to triage the damage, and things are chaotic.

I’ll wait until it stabilizes a bit, thank you.  Having my asset allocation out of whack for a while isn’t going to harm anything.  Just as it’s not good to make moves when emotions are high, I don’t think it’s good to make big moves to target a specific allocation when the market is this nuts. 

It’s like trying to predict where a bucking bronco’s hooves are going to hit the ground next.  Just wait till he calms down.

 

Time

All of this comes back to my biggest savings during these crazy market times – saving time.  I wrote this post pretty quickly, and I spent way way more time on it than I’ve spent dealing with my money during this crisis, or for the last 6 months for that matter.  

Which is to say I’ve spent almost ZERO time dealing with my money.  I checked my net worth and updated my beloved spreadsheet at the end of the month like I always do.  It took about 6 minutes. 

I’m down 10.4% for the year, not too bad.  Time for a workout.

Time is money, and those who spend hours and hours pouring over stock prices, companies to invest in, and reading articles as to what they should do are usually not counting their time as a huge cost. 

As the White Coat Investor said in his post yesterday “Following a written investing plan that says “Buy and hold” is similar [to a life plan]. It takes less time. It takes less effort. It takes less mental anguish.”

My time is much better spent on other things, like making my body better, working on my business, and enjoying the fun things in life. 

Granted, some who play the stock picking game like my blogging friends Freddy and Mr. Tako actually enjoy it.  It’s their thing.  If that’s your thing too, more power to you. 

As weird as I think their enjoyment of spending time pouring over stocks to invest in is, they surely think my enjoyment of climbing up big piles of rock only to come back down is.

Ya gotta have your thing.

 

Play Dead

Lastly, none of this constitutes official advice and you need to make your own money decisions.  But my track record is pretty good.  I reached financial independence in my mid-40’s, and I’m way way beyond it.  And I was heavily invested in both the 2000 crash and the 2008-09 crash. 

This isn’t my first or even second go-round at the big market-crash-rodeo.  My strategy got me through the previous two in amazing shape, and it will do the same this time.  Best yet, my strategy requires no time, and creates no anxiety about what to do.

Just play dead.