Every morning I receive a financial update over the Internet. It reports what happened in the major financial markets of the world the previous day. There is also a commentary that attempts to explain why the markets went up or down and where they might be headed in the future. This update is like a bad soap opera — I know I’m not going to learn much but I look forward to it every day. Over time its manic depressive state has become very apparent: wildly optimistic one day, desperately pessimistic the next. After a while it appears to be just so much random noise. .

A good example is the barrage of Y2K warnings we’ve suffered through during 1999. Yet I can’t help but notice the absence of any serious scare mongering in the press these days. Like O.J. Simpson, I think people are simply tired of hearing about it. Therefore, it’s not news anymore. By the time you read this newsletter, we will certainly know whether there was really anything to worry about. .

Obviously, some people are very concerned. I read in the paper about a poor chap who blew his house up. It turns out he was storing propane in his basement in anticipation of big problems relating to Y2K. He escaped with minor injuries, but I suspect he’s rethinking the Boy Scout motto about being prepared. .

In a recent article published in a fund company newsletter, Erich Almasy of Mercer Management Consulting stated that, worldwide, “more than Cdn$1.4 trillion has been spent so far to fix the Y2K Bug. This is twice the combined cost of the Vietnam War, the 1995 Kobe and the 1994 Los Angeles earthquakes, and the 1998 ice storm in Eastern Canada.” Hopefully these investments will prevent any cataclysmic catastrophes. If nothing else, businesses around the world should benefit from the technological upgrades they have undertaken. In addition, the one-time costs related to Y2K are behind them now. .

It sounds to me like it could be a time of opportunity rather than fear. As we enter the Year 2000, Canadian investors have an inordinate amount of cash sitting on the sidelines. If they choose to deploy that cash back into the equity markets, the increased demand will likely push prices up. After all, there are many positive factors going forward into the year 2000:

• Canada’s unemployment rate is at an eighteen year low.
• The worst of the Asian crisis appears to be behind us.
• Europe’s economy is strengthening as trade barriers fall under the weight of the Euro.
• The American economy continues to grow strongly without serious threat of inflation.

But you can be assured that the noise of the markets will continue. The debate over where we are headed—for the glorious new age of technology or the next great market crash —will continue in the press. .

Thankfully, most good fund managers ignore the noise and spend their time assessing the merits of individual companies. Frankly, we should do the same. Invest with discipline and ignore the noise.