I saw a fascinating video documentary on Neanderthal man recently on the Discovery Channel. Did you know that Neanderthals survived for 250,000 years in an unforgiving environment dominated by ice ages and fearsome predators?
Sure, they never had to cope with margin calls, but you also never heard them whining about Alan Greenspan either.
I bring this up because Internet and tech investors are now enduring their own ice age, one that began in March 2000 and shows no sign of easing for another — and I’m ballparking this — 249,999 years or so. At least that means a lot of rate cuts!
Maybe we’ll catch a break and the economic downcycle will play itself out by the fall. Until that happens, though, modern-day investors could learn from the experiences of the lowly Neanderthal.
Tip No. 1: Stay in your limestone cave until the ice age really is over.
Many’s the early human who mistook a rare brief sunny day as a signal to shed their animal skins and cavort outside, only to be frozen alive when the blizzard, predictably, resumed. Likewise, Internet and tech investors jumped back into the market several times since last summer after detecting what they thought was a permanent thaw. Today their remains are on display at the Smithsonian.
So when will we know whether the current ice age has run its course? Beats me. But I believe we’ll see the Nasdaq at 1200 before that happens. In other words, next week.
Tip No. 2: Carrying around your dead is a poor value proposition.
The Neanderthals quickly learned there was little advantage to keeping around tribe members who had expired. Not only did they stink up the cave, they were generally unlikely to recover. So the dead were buried unceremoniously and without hesitation.
Investors still carrying around their dead should do the same. Dig a small, shallow grave and deposit your shares of (fill in your losers here). Then walk away, grunting.
Tip No. 3: Don’t watch CNBC.
Even if they had cable, Neanderthals would feel little need to tune in to a channel that relentlessly bombards them with bad news. Yes, we know it’s freezing outside! We know there are predators! How about some footage from spring break!
Tip No. 4: Learn from the Cro-Magnons.
The end came for the Neanderthals with the advent of Cro-Magnon man some 35,000 years ago. That’s because the Cro-Magnons had better survival skills, made better weapons and ignored all advice from stock message boards.
Investors also must emulate the practices of those investors who have been successful over the long-term. These traders are patient, unemotional and emphasize value above all else. And they will survive to emerge from their caves when this ice age ends.
