6.9.26

What I Learned Behind the Velvet Ropes – Last week, I spent three days in Washington, D.C. hearing from former Fed Chair Janet Yellen, bestselling NY Times author Morgan Housel, and political strategists Karl Rove and James Carville. What surprised me most wasn't their forecasts: it was realizing that even the people closest to the biggest decisions in our economy are navigating uncertainty just like the rest of us. This week, I'll share the lessons on resilience, investing, and American optimism that stood out most, and why they matter for your financial future.

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Transcript

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Welcome to the weekend. This is a hype show, it's not a prediction. And it's definitely not a predictive every headline. Every episode, we step back from the noise and we focus on what actually matters. The signal shaping capital, policy, and markets over the next decade, not just the next day. Now, last week was a little different for me. I spent three days in Washington, D.C. at a National Wealth Symposium, and I had the opportunity to hear from some really remarkable people, former Federal Reserve Chair Dr. Janet Yellen, New York Times bestselling author Morgan Housel, and really a fascinating uh bipartisan conversation between Carl Rove and James Carville. Now, I was fortunate enough to spend some time behind the scenes, attend smaller sessions, and even grab a picture with Dr. Yellen. But as I flew home, the thing that stayed with me wasn't a forecast. It wasn't a prediction. It wasn't a hot market take. It was actually something much simpler. The people that we often see as larger-than-life figures are still just people. They have concerns, they have hopes, they have convictions, they even have uncertainty. And maybe that's an important reminder for us as investors. Because, you know, one of the biggest mistakes we can make is assuming somebody somewhere knows exactly what's going to happen next. And the reality is, even the smartest people in the room are constantly weighing probabilities, you know, adapting to new information and really truly making the best decisions they can with what they know at the time. So, in other words, they're doing exactly what we should be doing. They're preparing rather than predicting. And, you know, one story in particular really stuck with me. You know, Carl Rove, he he shared the story of his great-grandfather, who came to the United States with very little. And, you know, he basically described him as essentially a peasant. Those were his words during his um his time on stage. Uh a peasant was how he described his uh great-grandfather who worked hard, you know, embraced opportunity, and ultimately built a better life. Now, at one point later in life, he was offered an opportunity to return to his native country in more of a um official diplomatic role. And to accept the position, though, he would have had to renounce his American citizenship. And he refused. Not because it was financially advantageous, it wasn't because you know it wasn't politically convenient, but it was because he genuinely genuinely loved America and believed in what this country represented. The ability to dream big, work hard, create opportunity, and build something better for your children than what you inherited yourself. And I'll admit, um, and I'm you may hear the emotion in my voice right now, but I'll admit it was one of the more emotional moments of the conference. Because, you know, regardless of where any of us fall politically, it's so easy to spend time focused on what's wrong that we forget what's still working. And America has never been perfect, but it has been remarkably resilient. And that theme really came up repeatedly throughout the conference. Dr. Janet Yellen, she spoke about the labor market, you know, inflation, and the growing impact of artificial intelligence on the economy. And one observation that stood out to me from her interview was you know, her view that AI will likely improve productivity and raise living standards over time. And I and I agree. But she was equally clear that the transition may not be easy. You know, certain industries will change, some jobs will disappear, others will be created. And, you know, periods of innovation, they often create uncertainty before they create prosperity. You know, if we look at data and history, it shows us that technological progress tends to improve lives over the long run, but the journey can feel uncomfortable while it's happening. That's true in economics, it and it's true in investing. Markets rarely reward patience immediately, but over time, patience has a remarkable way of being rewarded. Another memorable moment uh came from Morgan Hausel. Now, many of you know Morgan as the author of the psychology of money. His presentation wasn't really about investing, it was about people. And at one point he made a comment that I wrote down immediately, and it was this he said, all behavior makes sense with enough information. And we if you think about that for a moment, you know, it doesn't mean every decision is right. It doesn't mean every outcome is good, but it just simply means that when we understand someone's experiences, you know, their fears, incentives, and circumstances, their decisions usually become easier to understand. And I think that's true in the markets too. You know, when stocks fall, investors often assume someone knows something terrible. When stocks rise, investors assume someone has certainty about the future. But usually neither is true. You know, people are simply responding to new information, adjusting probabilities, trying to make the best decisions that they can. You know, the market, it's ultimately just a collection of human behavior. And human behavior, as we know, has always been messy. So this brings us to what happened last week. Now, markets experienced some volatility, particularly in technology stocks. The Nasdaq late in the week pulled back roughly 4%. And at the same time, the labor market delivered another strong, strong jobs report with you know hiring coming in um above expectations pretty significantly. And now, as a result, expectations for Federal Reserve Cuts moved lower. Uh, there are even some talks about potentially rate hikes. Now, investors who were counting on easier monetary policy were forced to rethink their assumptions. That's the market headline. But here's the bigger takeaway the economy continues to demonstrate resilience. Not perfection, uh, but resilience. Growth has slowed from the breakneck pace that we saw after the pandemic. Inflation still remains above the Fed's target. You know, there's policy uncertainty, it remains elevated, but businesses continue hiring, consumers continue spending, and innovation continues moving forward. Now that's not a picture of an economy falling apart, that's really a picture of an economy adapting. And as I think back to the conversations from last week, one thing stands out. Despite their different backgrounds, different perspectives, and different beliefs, Janet Yellen, Morgan Housel, Carl Rove, and James Carville, they all arrived at a surprisingly similar s conclusion. The future will look different than the present. There will be challenges, there will be uncertainty, but betting against human ingenuity and American resilience has historically been a difficult bet to win. So what does all of this mean for you and for me? It means your financial plan shouldn't depend on predicting the next headline, it shouldn't depend on knowing exactly where interest rates go, and it definitely shouldn't depend on knowing which politician wins the next election. Really, here's what it should depend on preparation, diversification, patience, and really a willingness to stay focused on what matters most. Now I often think about uh that flight home from Florida with my son Caden. I've talked about this a few times before, but we hit a pocket of turbulence, and like most adults, my instinct was to grip the armrest. Caden started laughing. To him, it felt like an amusement park ride. Same airplane, same turbulence, but a completely different interpretation. The plane never stopped doing what it was designed to do. And markets can feel the same way. Volatility can feel uncomfortable, but discomfort and danger, those aren't always the same thing. Sometimes we're just simply flying through weather. So as we head into this week, that's the perspective that I'll leave you with. The smartest people that I met with last week weren't focused on certainty. They were focused on resilience. And that's exactly where long term besters should be focused as well. Thank you for spending part of your week with me. We'll keep watching the signals that actually matter until next time.