November 2025
Very Black Friday
What can the Apollo 13 mission teach us about investing?
The current market environment provides a compelling context for Thinking in Likelyhoods, particularly surrounding the shutdown’s political volatility, the resultant data drought in economic reports, and the shifting expectations for a December Fed interest rate cut.
Markets have sustained their upward trajectory throughout the longest US government shutdown in history, which finally ended this month after 43 days. While investor sentiment seems largely unaffected, consumer sentiment has been declining, the divergence of which has been widely described as a K-shaped economy - the upward prong of the K represents well-to-do folks driving economic activity, and the downward prong of the K represents low and middle income folks more vulnerable to inflation and employment pressures.
Throughout the shutdown, and still now with the government open but agencies taking time to resume their normal workflows and economic reports, we have a dearth of economic data on which to make investment decisions. I love David Kelly’s metaphor comparing the Apollo 13 mission to today’s situation (“The Importance of Navigation in the Dark”), where the astronauts had to power down virtually all of their instrumentation to preserve enough power for reentry, yet it was those same instruments that they needed to adjust their trajectory into Earth long before, at just the right angle and velocity, for successful reentry:
As their damaged spacecraft hurtled back towards Earth, the crew of Apollo 13 obsessively went over procedures – the actions they needed to take right then, and also when the computers came back on line, to give them the best chance of getting safely to their destination. Investors and those who advise them should do the same and with greater urgency precisely because of the current diminished visibility on the direction of the U.S. economy.
What to do when investors do not have the data on which they normally rely to make investment decisions? Well, as those astronauts taught us, they focused on the most essential components of their strategy and optimized for survival.
Investing is a no-called-strikes game, as Warren Buffett famously describes - meaning that you don’t have to swing at every pitch. You can wait as long as you want for just the right pitch, in just the right spot, to maximize the Likelyhood of success for your strategy in that particular situation. Particularly for data-dependent investment strategies, it is far better to take as many pitches as are needed and wait for more reliable opportunities than to force oneself into trying to make accurate predictions without the requisite data. Investors can rely more heavily on our core instruments - an informed investment process, broad diversification, and objective analyses of reliable data sources - to ensure that we stay on course and are prepared to take advantage of better future opportunities when they come our way.
ONE MORE THING…
Very Black Friday. U.S. consumers spent a record $11.8 billion, up 9.1% from last year. And A.I. helped. AI helps drive record $11.8 billion in Black Friday online spending
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