Synopsis: Some walls are built to keep people out, others to keep people in.
Others merely hold people, especially investors, back.
The cultural attaché was running, something he hadn’t done much of since his days training in the Virginia countryside, outside Langley. His black wing tips made a clip-clop sound on the linoleum floor that was louder than the hum of the fluorescent lights working overtime on the ceiling, and his thin black tie kept whipping past his face, fluttering against his horn-rimmed glasses. Sweat was beading around the edges of his close-cropped crew cut. At the end of the hall, he skidded to a stop, opening the boss’s door in a breathless flurry, assaulted by the smells of wafting cigarette smoke and stale sweat.
“Sir, you have to see this.” Plunging into the fog, he produced several black and white photographs and laid them in a row on the massive steel desk. The photos showed building materials, concrete blocks and barbed wire. All staged in massive depots, ready to...what?
“What is it?” The older man was gaunt and gray. He looked frail, but everyone knew the old man was a warrior from way back. He’d parachuted in to France with the old OSS before anyone hit the beaches in Normandy, and if he was a bit bony, those bones were rumored to be made of steel.
“Photos, sir. From one of our moles in the border units.”
“I see that. I’ll ask again. What is it?”
“We think they are putting together some kind of barrier. A wall or something.”
“A wall? Who are they trying to keep out?” Stubborn, and old school, it was hard for the old man to accept the modern technology of intelligence gathering, like micro-photography. World War II was over and Europe in shambles for the second time in a generation. A heavily damaged and demoralized Germany was divided like a political pie chart with four sectors representing the victorious Allies: Britain, France, America and the Soviet Union created to divide the spoils of war. But one of these countries was decidedly not like the others and was a little bitter about sharing territory with the western democracies. Berlin especially wore on the Soviet sensibilities. It was a bastion of capitalism in a sea of red communism, hundreds of miles from the western occupied zones but apportioned by treaty among all of the victors.
“Not keep out sir. Keep in.” The emigration, or escape depending on your sympathies, of over sixty-thousand easterners through Berlin had led the Soviets to close the border over the last few weeks. Then they had called in the army and the western powers feared an all-out invasion which they couldn’t hold back. Tensions were high. The ever sunny and pleasant Soviet leader Nikita Khrushchev would call the capitalist city “a bone in the Soviet throat.”
“You want me to call Allen Dulles and tell him, Mr. Director, we think the Russians and Germans have teamed up for a massive home improvement project? Looks to me like the made a visit to the Ace Hardware and are building some flower planters.”
The CIA analyst sighed. “Some flowers.” Few had a real appreciation for the real work of intelligence gathering out here on the business end of the Cold War. Least of all the old guard, hard-knocks intelligence officers who thought there was no substitute for having your own eyes on something, not just a camera. “Sir, if you look...”
The CIA analyst, under the guise of a cultural attaché to the embassy, began to gather the photos. “Leave them.” The boss commanded. “I’ll think about what you said.” The analyst gave a half smile and nodded. It was better than an outright rejection. The boss would do the right thing. Probably. He wondered what James Bond, the secret agent he had been reading about lately would have done? He liked the books, and he heard they were making a movie soon. He hoped to be stateside when that came out, eating popcorn and not sauerkraut. It was August 12th, 1961 and, in the morning, the Communist government and their Soviet backers began their building spree. In a matter of two weeks, a ramshackle, makeshift assortment of building materials separated East and West Berlin where it would stand for nearly thirty years despite threats and pleas to tear it down. The allies were caught completely by surprise.
Here is the lesson for Modern Investors: Economic and political complications created the Berlin Wall. They are the same sort of difficulties that build a wall those of us in the investment world know as The Wall of Worry. This mental barrier refers to all of the issues we deem important day after day that we surmise will sidetrack our investments in particular or capitalism in general. One by one, we add worries to our lists based on sound bites and supposition. Khrushchev never dreamed that publicly undermining capitalist economies could be so easy, but he couldn’t even dream of a twenty-four-hour news cycle.
A ‘short’ list of building blocks for today’s Wall of Worry goes something like this: US and Chinese tariffs, global trade, global recession, the yield curve, Federal Reserve repurchasing, the fall season, The Federal Reserve, Middle East tensions, domestic politics, no-deal Brexit, manufacturing data and an imminent invasion of the US by Canadian Mounties. Okay, I made up the last one to make sure you were paying attention.
What, if anything, is really new here? Does any of it take you by complete surprise? Other than the Mounties, I mean. Growth is always a concern somewhere in the world. And unrest, civil war and playing poorly with one’s neighbors and political opponents happen all the time. Thus, what the Wall of Worry truly separates, are market timers from long term investors. And if you believe the studies on the folly of market timing, it separates a lot of market timers from their hard-earned money. For all of the worries over the last few centuries such as strife, conflict and nuclear showdowns, the world hasn’t ended and investors who didn’t panic have hung in there just fine. A wall between speculation and investing? Long may it stand.
Photo: Bing.com, Free to share and use
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Don't wait for history to happen...