Timeless Investing Wisdom: What Individual Investors Can Learn from the Late Wall Street Legend, Art Cashin

Wall Street's Art Cashin, an investment legend, passed away earlier this month.

Art was widely known for his market commentary, making him one of the top voices on Wall Street. Known for his humor and storytelling ability, Art’s newsletter, Cashin’s Comments, was read daily by more than 100,000 people.

The Cuban Missile Crisis

Art was able to take the complex and make it simple.

In the investment world, this trait is invaluable. One of Art’s famous stories stems from his time as a trader during the Cuban Missile Crisis. The story goes like this:

“It was the early 60s, and word spread that something had happened and that the Russians had actually pressed the button and that the missiles were flying. The option market wasn’t on an exchange in those days, it was over-the-counter and you had to call around. I had virtually no money, and I was looking to see if I could make a $100 bet by buying a put or some such things. And everywhere I called I couldn’t get anything done. So I cleaned up and rushed down to the bar. And Professor Jack was already in the bar, and I came bursting through the doors as only a 19- or 20-year-old could. And I said, ‘Jack, Jack. The rumors are that the missiles are flying.’

He said, ‘Kid, sit down and buy me a drink.’

I sat down and he said, ‘Listen carefully. When you hear the missiles are flying, you buy them, you don’t sell them.’

And I looked at him, and I said, ‘You buy them, you don’t sell them?’

He said, ‘Of course, because if you’re wrong the trade will never clear. We’ll all be dead.’”

The Challenges of Investing are Relearned by Each Generation

If you replace the Cuban Missile Crisis with the recent major market events of history (The Great Recession, Covid, etc.), you’ll see that many investors behaved the same way.

The more things change, the more they stay the same when it comes to investing.

Art was known for his humor. It shines through in this story. But underneath his wit, he had a very important message.

Investing is highly emotional.

It always has been, and it likely always will. Volatility is the price you pay for owning stocks.

We don’t know when or where volatility will rear its ugly head, but we know it will.

Remember this story the next time it feels like everything is going to hell in the markets.

We’ve been there before, and we’ll be there again. Have a plan, stick to it, and most importantly, stay out of your own way.

Sources:

1. CNBC

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About The Author

Caleb Pepperday, CFP®, ChFC® provides Fee-Only Financial Planning and Investment Management Services for medical professionals. Advanced Practice Planning, LLC is based in Missoula, MT, but primarily works with clients in a virtual capacity nationwide. As a CERTIFIED FINANCIAL PLANNER™ and fiduciary, Caleb Pepperday works to create financial plans for medical professionals with their best interest in mind. As a Fee-Only financial planner, Caleb Pepperday is only compensated through the investment management or financial planning fees that you pay him directly and never earns a commission. Caleb Pepperday primarily focuses on helping mid-career and pre-retiree Physician Assistants/Physician Associates retire with confidence.

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