I must once again beg your pardon, for I can draw no correlation between part one of this commentary and your portfolio. Part one’s for those who’ve asked that I not refrain from sharing a personal essay when so moved. As for those whose visits here are strictly business, I can relate, so by all means skip to part two (The Market, 2011), then on to your to-do list.

For some reason, maybe it’s the season, I find myself in the mood to reflect. And as I look back upon 2010, I believe I’ve identified a distinct trend in my firm’s trade with our local florist– it’s on the rise. And if I’m not mistaken, it’s been on the rise for the past several years. So now I’m wondering, are we becoming more sensitive, more sentimental perhaps, as we grow older? Or is it simply that we’re all growing older–and thus presented with more opportunities to extend our well-wishes and, alas, our condolences? I’m afraid it’s the latter. And the latter brings to bear the seemingly unsavory side of life; the medical emergencies, diagnoses of terminal illness, the death of loved ones–those constant reminders that we must never take life, nor our relationships, for granted.

So as we usher out 2010, and usher in this Holiday Season, rather than subject you to the obvious–a synopsis of the market/economic happenings of the year that was, or, worse yet, an utterly worthless prediction of what’s to come (although there is part two [which I encourage you to read]) – I’d like to share the following tribute to our elders, to those who have worked so hard, who have paved our ways, and whose bodies are now, as our monthly florist bill indicates, giving way to time…

The Opportunity of Our Lifetimes

The most influential people in our lives have surely been our seniors. As children we had no choice but to give our attention to our parents as they lovingly (or otherwise) imparted to us their life-lessons. As adults the choice is ours, we are free to listen, or not, without consequence–or so we assume. And that assumption, sadly, is a most erroneous one indeed. For when we choose, all too often I fear, to not give our attention to our elders, the consequence, while inarguably subtle, is unmistakably dire.

As we’ve come to learn, our way-pavers have logged into their memories experiences that you and I could not imagine were it not for their stories. As a child I would sit at the feet of my maternal Grandmother, the daughter of a New Mexico “lawman”, while she rocked her creaky old rocker and told of playing gin with the town drunk through the bars of a jail cell. I lived for the summers I would spend with my paternal grandparents at their cabin in the woods of Northern California. I listened tirelessly as my Grandfather, a Spanish immigrant, passionately lectured on how America was the greatest country in the world, while we fished pristine waters and walked beautiful mountain roads each morning. Then returning to the warm embrace of Grandma, who lived to please others in a way only grandmothers do. My father tells of being abandoned to the forest to cut a cord of wood, with an axe, in the summer of his twelfth year. Of, as a young man, pulling “green chain” at a saw mill. Of playing football without a face mask. He taught me how to work hard and how to “play with pain”. And my dear departed mother, a California farm girl, endlessly strove to teach her sons that true success is not to be measured by a number, and that it is by far the easiest of all endeavors. That to be successful means nothing more than to be honest, to live with integrity, and to be of service to others–and oh how she lead by example.

Of course my family stories are not at all unique, and yes there are those I might share that would not inspire nearly the sentiment you’re feeling at this moment. But honestly, such stories would in no way detract from the message herein.

You see generations will pass, as will the tales–ultimately to die on the deaf ears of descendants yet to be. But this is the way of it, and this is fine. For the grand consequence of our choosing not to listen is not that we would miss some profound life-changing message or that we might forever lose our family history. What we would miss is a most subtle, yet most extraordinary opportunity.

While their intent is to teach us the art of living (and to be sure they do), these great purveyors of wisdom, without knowing, are teaching us something far greater, something not to be found in the content of their words–they are teaching us the art of giving. For when we truly listen, attentively, to the yarns of their past, we are doing more for our beautiful masters than their arthritis medications ever will. Indeed, in the mere act of extending our ears we extend our love (which becomes their sustenance as their bodies give way), and in an instant, we are givers, we are artists, we are better human beings. Clearly, in the end, we are tending to ourselves.

So when you say to your loved one, or that shriveled old woman in the street, “thank you for sharing”, you truly mean it, for she has blessed you with the opportunity of her lifetime.

Several years ago, during a deep life and death conversation with a friend, I issued the following proclamation: “When my body is spent, when old age renders me useless, I will find my way to the arctic, break off a chunk of ice, lie down on a blanket and drift off to sea, like the old Eskimo.” As my bravado dissipated my parents came to mind–wait a minute, I thought, what if that were their idea of how their lives should end? Then the selfish realization–as their son, under no circumstances could I accept such a notion. Not that it wouldn’t be a fitting way to leave this world mind you, but that they’d be robbing me of the joy of giving myself to them in their final days. The joy of listening to them, the joy of doing whatever it takes to bring them comfort while their lives change seasons, the joy of loving them, one last time. I’d truly be missing the opportunity of our lifetimes.

“Only a life lived for others is a life worthwhile.” Albert Einstein

The Market, 2011

As for what to expect in terms of the market in the coming year, I’ll start by pulling from N.N. Taleb’s bestseller The Black Swan (a must-read by the way). In Part 2 (titled We Just Can’t Predict) he lists “Experts who tend to be experts” as follows: Livestock judges, astronomers, test pilots, soil judges, chess masters, physicists, mathematicians (when they deal with mathematical problems, not empirical ones), accountants, grain inspectors, photo interpreters, insurance analysts (dealing with bell curve-style statistics). He then follows with “Experts who tend to be … not experts” (I shortened this list, as to not offend an individual or two who come to mind): Stock brokers, college admissions officers, court judges, personnel selectors, CIA agents, economists, financial forecasters, finance professors, political scientists, “risk experts”, august members of the International Association of Financial Engineers, and, alas, personal financial advisers.

“Not Experts” Abound

 Walking into the gym one morning last week–my iPod volume set too dang low–I hear “Hey Marty” coming from a familiar (glistening) face peering above the stationary bike panel to my immediate left. As I grasp his extended, rather wet, right hand with mine I say to my panting friend “Hey man, how are ya?” He says “good”, then gets right to business–“So how’s next year looking?” I’m thinking oh boy, here we go, now don’t answer Marty (not that I even had an answer), just see if you can get him to not give his prediction. So I shrug and say “you know what, the more I know, the more I know what I don’t know” (praying my humility will shame him into an accepting nod, another slippery handshake and a parting “Happy Holidays”). He grins confidently (my prayer rejected) then proceeds “Well, the market’ll be up next year, but not by much”. I immediately interject (as I catch him catching his breath) “hey, makes sense to me” thinking whew, that’s it… kept it short (also thinking how the hell does he know?), now to the hand-sanitizer. But no, we spent another fifteen minutes (I only allotted thirty for my workout) jawboning about taxes, deficits, unemployment, and party affiliations before bidding our farewells. As I retreated to the dumbbells (I’m talking the weights, not the dudes lifting them), after a stop at the rubbing alcohol dispenser, I’m thinking that was alright, I did good, the guy needed to talk and I listened, so what if my workout’s cut short. I then realized that I had missed a golden opportunity to give my standard smart-a** prediction (the one designed to discourage future inquiries of the sort)–that the market will end 2011 higher, lower or about where it is right now. Oh well, next time.

As you can tell, when it comes to predictions, Mr. Taleb and I are firmly on the same page. And if you happen to be a client, may my humility be your relief. Trust me; you do not want your advisor to suffer such delusion.

On the other hand, I can offer the following high-probability forecast: In the coming year, someone you care about will experience a life-altering event. And thus, if you’re expressly fortunate, that someone will bless you with an opportunity you’ll not want to miss–an opportunity to practice the self-expanding art of giving. The rewards from which, unlike a gain in your portfolio, you’ve no chance of outliving.