OUR PERSPECTIVES


K-Billy’s Super Sounds Of The 70’s

Well I don’t know why I came here tonight,

I got the feeling that something ain’t right,

I’m so scared in case I fall off my chair,
And I’m wondering how I’ll get down the stairs,

Clowns to the left of me,

Jokers to the right, here I am,

Stuck in the middle with you.

Stealers Wheel 1973

 

Reservoir Dogs [1992] was Tarantino’s neo-noir crime thriller debut incorporating many themes that went on to be hallmarks – violent crime, pop culture references, profanity, and a non-linear storyline. It became a cult hit and was voted one of the greatest independent films of all time. It achieved modest success at the box office, and then elevated in popularity after the release of Tarantino’s next film, Pulp Fiction [1994].

One of the more prominent elements of the movie is the soundtrack which heavily features “K-Billy’s Super Sounds of the 70’s” delivered by the deadpan comedian Steven Wright, which operates as a jarring counterpoint to the on-screen action. In the iconic ear-cutting torture scene, which apparently even the actors struggled to finish, the protagonist hums along to “Stuck in the Middle with You”, his relaxed state exacerbating the impending violence.

It’s a puzzling scene where the viewer is unsure as to the backstory and motive, which only becomes clear later on – not unlike financial markets today. (tell me you saw that coming?)

Markets will fluctuate (thanks J.P Morgan) amidst periods of calm and distress. Things that we think are a given turn out to be an assumption only. Herd mentality thinking is powerful, virtually hard wired in humans, and is a proven winner from an evolutionary standpoint – but not an investing one.

The American economy looks strong (albeit the share market is ahead of it), Chinese growth will fall from 8% to 4% yet is no big deal given the much larger size, Greek viability questions will resurface, the commodity cycle will rebound at some stage, interest rates will rise in the US before Australia. The investment horizon is never worry free, one can go back in time and, each year, find a global macro or localised concern which caused doubt, or even the feeling of “I’ll sit out until x has passed and then I’ll hop back in” – seductive yet pointedly invalid thinking given market lows are not identifiable until the fullness of time.

Yet, balanced and diversified portfolios continue to deliver appropriate returns with a prudent amount of risk.

Most stockbrokers and almost all the financial press are in the entertainment industry – worth keeping in mind. Clowns to the left and jokers to the right all right – stay balanced, understand both your portfolio and your plan of action – and enjoy being in the middle.