Ignore the Distractions

Kenneth Coniglio |

I saw a recent quote attributable to David Bahnsen, who oversees the management of over $4.5 billion in client assets at the Bahnsen Group.  Prior to launching The Bahnsen Group, he spent eight years as a Managing Director at Morgan Stanley and six years as a Vice President at UBS. 

In an interview, David was asked for his opinion on the current condition of the U.S. economy. He rattled through this list (off the top of his head!):

“Short-term market-watching does not get easier by attaching it to short-term economic data. For some time now pundits have been pulled in two directions at once. Manufacturing? In decline for over a year. Factory construction? Up 75% over the last year. Unemployment? Well below 4%. Labor force participation? Still dramatically lower than its pre-GFC high. Trade deficit? Down (that is good). Total global trade levels? Down (that is not good). Japan’s economy? Better in many ways. China’s economy? Worse in many ways. Housing prices? Have not collapsed at all. Housing sales volume? Totally collapsed. Housing demand? Not collapsed. Housing supply? Collapsed. Core goods inflation? Gone. Core services inflation? Not gone.

“I can go on, but this is the tale of the tape—economic data everywhere you look that is maddening to the pessimists and not quite reassuring to the optimists.”

This insight is probably as good an argument as any as to why you should ignore the distractions and the constant “noise” and buy world class companies (stocks) that “put up the numbers” despite it all. Chances are they’ll go up a lot more than they go down over time, not just at moments in time.  Investing is a long-term proposition.  The secret to sleeping well at night is to invest in great companies that are producing the kinds of products and services that are shaping the world we live in today and will define our world tomorrow. 

These companies are investing trillions of dollars that will get spent no matter what the Fed does next, no matter who wins the elections and no matter how the pundits try to spin the data to back their forgone conclusions.