By DAVID MOON, Moon Capital Management, LLC
November 7, 2010
I don’t understand Daylight Saving Time. If people want to enjoy more daylight hours in the summer, they should quit sleeping through the morning light. If school officials are worried about kids waiting on buses in the dark, why wait until November to change the clock? Wasn’t it just as dangerous the past five weeks as it would have been this week?
If (and some studies suggest this is a big if) energy consumption is reduced by resetting clocks twice a year, what about unintended costs like increased crime and automobile accidents due to “more” daytime darkness in the winter?
We continue this silly habit for a couple of reasons. One is inertia. Once we start doing something it is difficult to stop, irrespective of whether or not it makes sense.
Look at your local telephone bill. Somewhere on there is an excise tax that no one can explain. Guess when this federal tax originated? It was originally instituted to help pay for the Spanish-American War in 1898. A series of extensions has kept the tax in force almost constantly since then.
Sir Isaac Newton was right. A body in motion tends to remain in motion, especially if it’s complicated and produces revenue for the federal government.
Or something like that.
Another reason we continue Daylight Saving Time is because we like to feel in control of situations even when we aren’t, especially when we are overcome with anxiety. God tilts the earth away from the sun and creates some additional darkness. We don’t like it and Daylight Saving Time is our version of playing God.
Similarly, investors tend to make silly decisions when things don’t go their way. The stock market declines and so do 401(k)s. Some investors feel as if something has to be done, even if it’s wrong. They have to take action, just to feel as if they are trying.
People sell stocks simply because they’ve gone down, or buy others because they’ve gone up. Or people do something because a barber suggests it. Or a convicted Watergate hotel burglar. It makes them feel empowered.
Sometimes the best action to take is none. Sometimes. But this is difficult to do in an anxious state because it suggests helplessness, even though a decision to do nothing can be an active decision.
Did you ever wonder why the Postal Service won’t let you put a package weighing more than 13 ounces with stamps on it in a drop box? Presumably it is to prevent bad guys from mailing bombs and envelopes full of dangerous stuff.
But if you go to the Post Office, you can hand a postal employee your parcel and watch them simply toss it in a bin, regardless of its weight.
The 13-ounce rule makes us feel like we’re doing something meaningful, sort of like walking around airports in our socks with our pants drooping below our drawers like rap-singer thugs.
The next time you are about to make a change in your portfolio, question your motives. Does it really get you closer to your goals, or is it simply an attempt to make you feel better?
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).