TINA Is Stupid

Getting Lucky
Artificial Reality
Locked In
Washington DC, Maine, and Colorado

In the 1980s, British Prime Minister Margaret Thatcher liked to say, “There is no alternative” to her market-driven economic reform ideas. She said it so much people began abbreviating it as “TINA.”

Whatever you think of Lady Thatcher’s policies, the slogan was certainly effective politics. If victory is inevitable, you can either cooperate or be left behind. But her phrase actually goes back further to an 1851 book by Herbert Spencer, who also famously coined “survival of the fittest.”

More recently, TINA has been applied to investing. You must buy stocks because TINA. You can’t make money any other way. Just close your eyes, buy and hold forever. Or at least through a full market cycle.

Frankly, I think that’s stupid. It isn’t true. First of all, buying and holding stocks isn’t guaranteed to work no matter how long you give it. There have been periods where stock market returns were less than zero for 20 years. Starting in 1966, it took 16 years for the market to recover back to its original level and in inflation-adjusted terms it was 26 years. The first decade of this century was essentially flat (see chart below).

However, there is nothing like a roaring bull market to make everybody forget the past. We all know it’s different this time (note sarcasm). I mean, the Fed has the wind at our back, and all we have to do is to unfurl the sails and move ever forward. Thus TINA.