The Freedom of an Uncertain Tomorrow

“I have to know what happens next!” That suspense keeps us glued to movies and TV series. In real life, we tend to enjoy it far less.

We want control over the future. We feel we can relax once we know what comes next. Yet our power over an uncertain tomorrow is fleeting and, ultimately, an illusion.

At events, I often tell audiences that I do not know the future. So I also do not know where stocks will be a few months from now. The same goes for the dollar, gold, oil, interest rates, and so on. And without fail, someone will ask a question seeking exactly that answer. With practice, you eventually learn to respond professionally, without sighing, rolling your eyes, or displaying any other inappropriate reaction.

Uncertainty will always be part of life. Unfortunately, we have no control over it. Those who learn to handle uncertainty well, or even feel comfortable with it, tend to be more resilient to stress than others.

Predicting the future matters less than assessing the information we already have correctly. Take a company’s revenue growth over the next ten years. A forecast can only take you so far. Its current market position, competitive advantages, pricing power, balance sheet quality, the ability and integrity of management, and the competitive landscape tell us far more.

In the Eye of the Beholder

As you can see, developing a deep understanding of all these factors is a formidable task that takes time and energy. Things become especially challenging when all this qualitative information has to be weighed against the company’s current share price. There is no definitive answer to the question, “Is this stock cheap or expensive today?” The judgment is always in the eye of the beholder.

Nobody has all the information. Investing is about gathering enough data points to make an informed assumption based on experience. Taking the final step toward a buy or sell decision always means stepping into uncertainty. Investors who can tolerate that uncertainty are far more likely to feel comfortable in the markets and succeed over time.

And with a little distance, we may eventually realize that uncertainty is part of what makes life beautiful. Freedom means that tomorrow remains beyond our control.