The hard thing about hard times

I’ve fielded a lot of calls from startup employees and executives this week. The common theme this week and the previous year is a lot of regret. People wish they sold shares into strength during the height of the bull market. People wished they planned better. People wished they diversified more. You get the idea.

There’s a lot of shoulda woulda coulda. You can’t control what happens in the past, but you can control the future. Unfortunately, what I’m seeing is that a lot of people are compounding their mistakes right now.

Someone who was not properly diversified got whacked by the tech markets crashing so they sell everything to get out. Now that individual is sitting on a whole bunch of cash and will miss the run back up.

Someone who didn’t sell in the bull run will hold onto to shares hoping for 2021 pricing to come back and may be left waiting a long time, or perhaps forever.

Of course, not everyone’s situation is the same. You can get lucky in this world. It may be a smart move to do one of the two examples I mentioned above. But for most, holding onto the past is going to come back to haunt them once again.

That’s the hard thing about hard times. As in when times are good, you can still act irrationally when times are bad. Many made a bad bet in 2021, and then will look to double down on that bet. On the flip side, many will learn from their mistakes and correct course. History has shown us that more times than not, the latter will end up in a better position.