The paradox of expectations.
John Cage was a composer, music theorist, and philosopher who tested the boundaries of contemporary music.
A leader of the avant-garde movement, he pioneered the non-standard use of musical instruments and is considered one of the most influential composers of the 20th century.
His most important piece is the 3-movement composition 4’33”, which contains two unique elements: it can be played on any instrument and anyone, regardless of their musical ability, can perform it flawlessly the first time they attempt it.
More on that in a moment.
One of Cage’s hallmarks was the way he created music.
Instead of rejecting the historical norms and traditions of music theory, he used them as foundations, then through experimentation and improvisation, modified his compositions until they became something new, yet familiar.
History doesn’t repeat, but it rhymes. The same is true of the stock market.
How much it rhymes matters to active investors as they attempt to take advantage of patterns and cycles seen in previous markets.
Price action in every market is new, yet familiar.
The line between the two is hard to see if you’re not paying attention to the right things.
On the evening of August 29th, 1952, David Tudor crossed the stage at Maverick Concert Hall in Woodstock, New York, sat at the piano, placed a score on the stand, closed the lid, set a stopwatch - and sat quietly for 33-seconds
At the 34th second, he briefly opened and closed the lid, re-set the stopwatch, and continued to sit quietly for another two minutes and 40 seconds, moving only to turn the pages of the score.
He repeated this process for another one minute and 20 seconds, then stood, bowed, and walked off stage to a smattering of polite applause from the somewhat confused audience, who, unbeknownst to them, just witnessed the first public performance of 4’33”.
After the concert, confusion turned to anger, as audience members proclaimed that Cage played them for a fool, thumbing his nose at western concert tradition by having them listen to silence.
A local artist became so irate that he yelled, using the day's parlance, “Good people of Woodstock, let’s drive these people out of town!”
Cage wasn’t fazed. Nor was he upset by the reaction. The audience just didn’t know what to expect.
The inspiration for 4’33” arrived in 1951 when Cage visited the anechoic chamber at Harvard, a sound-proofed room in which the walls, floor, and ceiling are designed to absorb all sounds.
Expecting to hear complete silence, he instead heard two sounds, one high-pitched and one low-pitched. The engineer in charge explained that the former was Cage’s nervous system in operation, while the latter was the sound of his blood circulating.
Sitting in a concert hall with a ticket stub in your pocket, a well-dressed man emerges from the wings, walks to a piano placed center stage, takes a seat, and places a score on the stand.
It’s a familiar setting, and as in other similar settings, it would be reasonable to expect music to follow.
But in this case, the expectation was wrong. And it limited what the audience was willing to consider, something Cage reflected upon years later.
They missed the point.
There's no such thing as silence.
What they thought was silence, because they didn't know how to listen, was full of accidental sounds.
You could hear the wind stirring outside during the first movement.
During the second, raindrops began pattering the roof.
And during the third, the people themselves made all kinds of interesting sounds as they talked or walked out.
There is a lot of talk about newbie investors and how they haven’t been around long enough to know what to expect in a bear market.
It’s a fair point.
However, expectations cut both ways.
Those of us who have been around for a while have seen markets like this before.
The price action is familiar. It rhymes. And we think we know what to expect.
Maybe we’re right.
But perhaps we should view this market without expectations - or limits as to what can happen.
Check out this week’s Lund Loop podcast where I talk more about managing expectations for this market.
Market Strategy Video: 05-20-2022
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