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Covid 19 and Green Swans: Surprising Insights from An Investing Legend

  It’s hard to escape the global pandemic: the daily barrage of death toll numbers, depressing pictures of ICUs and a steady stream of viral video clips that remind us of our past life while lamenting our current plight. Larry Hite, the seasoned and highly regarded hedge fund manager and bestselling author of The Rule: How I Beat the Odds in the Markets and Life—And How You Can Too, shared his thoughts about the pandemic with Big Fish Media.

Larry’s rags to riches story was fraught with many challenges, including severe learning disabilities and vision problems. Through sheer perseverance and determination, he went on to found and run Mint Investment Management Company, one of the most profitable and largest quantitative hedge funds in the world. Ever the optimist, Larry reminded us that when life is uncertain and anxiety is high, remember and return to the basics.

1)   We are adaptable—Larry reminds us to look at history. Great, disruptive events have occurred—from the 1918 Spanish flu, the September 11, 2001 attacks and the 2008 global financial crisis. Man has the ability to think and with that comes the ability to adapt. It’s inevitable that many people will die and COVID-19 will change how we live but like other major events, we adapt to the new circumstances and will come away stronger.

2)   Have a plan—Larry is clear: the COVID-19 pandemic is not a black swan. It is not an unusual event but one that requires us to plan and even rethink our priorities. A self-proclaimed “trend follower”, Larry encourages us to try different things; “if it works, keep at it; if it doesn’t, move to something else.” The important thing is to keep your momentum and move forward.

3)   Focus on the long-term—Larry reminisced that his grandmother was born during the horse and buggy era but lived to see a man walk on the moon. There will continue to be many technological changes in our lifetime with machines replacing people and jobs. Having a long-term mindset and perspective will require you to periodically re-train and acquire new skills to move forward, he advises.

People forget that we’ve experienced “green swan” events in the financial markets over the last 30 years. Regardless, in good years and bad ones, people adapt and create opportunities from these events.

Special thanks to Big Fisher Sarita Venkat for this interview and article!

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