In bear markets, we’re overwhelmed by what we don’t know. Everything gets turned on its head. Long-held assumptions go out the window. And we’re left with a whole new set of questions.
Bob Hager, my former partner at PH&N, said, “With every bear market, there are always unknowable concerns, and every time we’re told that this bear market is different.”
In the current crisis, we’re working on two big questions that weren’t even on the radar a month ago. Namely, how long will the economic disruption go on, and what will the new normal look like after the recovery.
As we wrestle with these and other unknowables, it’s useful to lay out what we do know. As investors, we have new information and some time-tested truths to work with.
What we know this time
Markets have adjusted swiftly to the new reality. In fact, the speed of the drop was