The Art of Understanding

Four months into coronavirus, the media continues to overflow with articles about the spreading virus. Linguistically, they often talk in terms of war and battle, as if the virus is intentional, reacting to our defensive moves with counteroffensives. Whether that is an appropriate metaphor or not, we know that the ongoing stress that comes with being unremittingly on guard is wearing us down, and that there have already been far too many deaths.

In his classic fifth century BC treatise on strategy[1], The Art of War, Sun Tzu wrote of the need for understanding ahead of battle. “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” Today we need both knowledge of ourselves and knowledge of the virus in order to move forward with confidence — and defeat the pandemic.[2]

Know Thyself

Financial decisions can bring individuals and families a great deal of stress, and a key part of our work as advisors is to navigate the anxiety so that confident forward choices become possible. Facing financial decisions can bring stress not only when you simply don’t have sufficient resources, but also when the landscape of unknowns is so great that you are effectively immobilized and unable to make any decision at all. Making sense of this landscape can be a game changer in terms of developing confidence.

Our work with clients happens on a micro level — with a single individual, a couple, or a family. The examples are all over the map: cash flow management, elder care, deciding to retire, legacy planning, buying real estate, funding higher education, understanding risk tolerance in investing, and business planning. Learning to articulate personal priorities can be hard when you are facing technical decisions. If you lack technical expertise, but believe that there is a “best” technical answer to be found, you may have difficulty bringing your own priorities to the forefront. Or, you may have been avoiding financial decisions altogether.

Once you get curious about yourself, though, you begin to develop an ability to see the context of your own life and concerns. From there, you can build an understanding of how technical issues impact your particular needs and visions for your future; this level of clarity supports making good decisions. You can’t foretell the technical future — stock prices, tax rates, regulatory changes — but you can have confidence that you made an informed decision relevant to your intentions and circumstances, and you gave yourself the best chance of success.

The current environment of virus exposure risk has been a case study of how to develop confidence in decision making. Four months of experience titrating uncertainty, risk, and household needs has taught us a lot. We are learning our own context, and gaining clarity about our priorities. Now it is easier to handle the unpredictability of policy changes, and make decisions to manage all aspects of our lives. We have discovered that total lockdown isn’t necessarily needed, but smart distancing, mandatory mask fashion, and carefully considered timing of activities are in fact essential.

Understanding the “Novel” Virus

If we are to move forward to better and more nuanced choices both at home and at work, we need more information about the coronavirus. It is called a “novel” coronavirus because it is new, and not yet well understood. Can the virus recur with different manifestations at a later stage of life, like the chicken pox virus? Might symptoms recur under stress, like the herpes virus? Will it morph annually like the flu, but potentially be more lethal? Only when we understand it better will we be able to effectively manage it.

One big challenge in pursuing necessary research is chronic underfunding of our public health system and supporting organizations. A national leader like the Center for Disease Control and Prevention (CDC) cannot spring fully into action during a crisis if its resources have been incrementally reduced over time. Now we are “racing” to catch up, with huge amounts of funding going to companies working on vaccines, and plans to allow faster approval processes for human testing. Dubbed “Operation Warp Speed,” a $10B budget supports a public-private partnership to develop vaccines, treatments and testing for the virus as quickly as possible.

The acceleration of work during the pandemic that should have legitimately started much earlier has been disconcerting to many. Warp speed is fictional time travel, and conveys a sense of unreality. Scientists and the public alike have understandable trepidation about the danger of insufficiently tested vaccines, with a mid-May survey in the US indicating that only 49% of those surveyed were sure they would take the vaccine.[3] Managing our lives amidst the ongoing virus may be more realistic, and more grounding, than being instantly trsported to an unknown future.

As Sun Tzu said, if we know ourselves — our risk tolerance, our susceptibility, our need for public interaction — but we don’t know the enemy, then for every victory we will also suffer a defeat. This is the circumstance we find ourselves in right now, with some successes ramping up economic activity (and personal activities) but resurgent transmission, and again the threat of overwhelm for health care providers. When we use the phrase “public health policy” we are talking about prevention, not just development of cutting-edge medical treatments, or successful vaccines. We are talking about understanding the virus; if we do that, rather than waiting for effective medical treatment, we can make sure that entire communities don’t get sick to begin with.

Wash, Rinse, Repeat

There may be many cycles of shifting public health policy and behavioral choices needed as we manage our health, our lives, and our economy over the next several years. Historically, pandemics were managed as they waxed and waned over not only years, but even decades waiting for scientific advances to find a solution that radically reduced transmission, provided effective treatment, and reduced both the instance of illness and deaths.[4]

What we are facing is manageable, if we have the humility to look truthfully at ourselves, and the patience to allow science to take the time needed to understand the virus. Policy guidelines are supportive in our personal decision making, although they change in response to community circumstances. The shared iteration of caution and experimentation can over time become a broad-based commitment to the right preventative measures, while we wait for the most effective medical tools.

On a day to day basis, mental and physical health depend on coherence in decision making. It matters what you are doing. It also matters why you are doing it. Thoughtful engagement won’t hurry along an effective vaccine, or ensure that once developed everyone will be willing to take it. Still, you will bring yourself some measure of equanimity, and you can share that. You’ll have your own clarity, and once we understand the virus, you’ll no longer need to fear the battle.

More articles at NorthBerkeleyWealth.com

[1] Sun Tzu, The Art of War, 500 BC.

[2] In “defeating” the pandemic we mean reducing transmission to zero. The virus may or may not actually die out, or morph into a less lethal strain, but the key element to return us to vibrant social life and a robust economy is eliminating transmission.

[3] Warren Cornwall, “Just 50% of Americans plan to get a COVID-19 vaccine. Here’s how to win over the rest,” Science, June 30, 2020.

[4] Donald G. McNeil, Jr., “Your Ancestors Knew Death In A Way You Never Will,” The New York Times, July 15, 2020.

Disclaimer: This commentary on this website reflects the personal opinions, viewpoints, and analyses of the North Berkeley Wealth Management (“North Berkeley”) employees providing such comments, and should not be regarded as a description of advisory services provided by North Berkeley or performance returns of any North Berkeley client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. North Berkeley manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

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North Berkeley Wealth Management

North Berkeley Wealth Management

A values-driven wealth management firm helping clients create a sense of calm in their financial lives through responsible investment and thoughtful planning.

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