On September 2nd, the music world paid tribute to the passing of singer turned business mogul Jimmy Buffett. Jimmy was known for his laid-back lifestyle, island style, and catchy tunes – Margaritaville the most famous of all was his only top 10 song.
While he didn't kill it on the charts, he built a business empire around his music that includes restaurants, casinos, retirement communities, bestselling books, and even a musical. His worth was estimated at $1 billion, according to Forbes.
As a Parrothead myself, it was a sad day to hear of Jimmy's passing. In tribute to him, let's take a look at how some of his lyrics in “Changes in Latitudes, Changes in Attitudes” relate to the investment world. This is a financial newsletter, after all.
Changes in latitudes, Changes in (stock) attitudes
- “I took off for a weekend last month, just to try and recall the whole year”: In the context of the stock market, investors would be wise to review their portfolios at year end to take stock of what worked and what didn't. Sometimes, it's necessary to pause and reflect on one's financial and investment decisions. A year goes by in a blink of an eye.
- “Reading departure signs in some big airport reminds me of the places I've been”: This line could represent investors studying market indicators and signals to gain insights into the direction the market might take. Departure signs in an airport can be seen as analogous to financial indicators that guide investment decisions. While no one market indicator tells the whole story, it is important to understand where we are in the business cycle to better control risk.
- “Changes in latitudes, changes in attitudes”: This central theme of the song can be metaphorically related to the stock market's constant fluctuations and investor psychology. It is important to take emotions out of investment decisions because often times the best time to buy is when the market is crashing and to sell when the market is euphoric.
- “Nothing remains quite the same”: This line highlights the ever-changing nature of the stock market. Markets are dynamic, and conditions can change rapidly, making it essential for investors to adapt and adjust their strategies as needed. This has certainly been the case in the last 4 years as we have seen two bear markets in a very short period of time.
- “If it suddenly ended tomorrow, I could somehow adjust to the fall”: In the stock market context, this line could reflect the resilience of investors who have the ability to adapt and recover from market downturns. It also reminds me of the Warren Buffett quote “Only buy something that you'd be perfectly happy to hold if the market shut down for ten years.”
As we say farewell to Jimmy, remember to put on your aloha shirt, grab a drink with friends, and always laugh because, “If we couldn't laugh, we would all go insane.”