The Generals

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I recently finished reading the book “Brothers Against Brothers”, (History of the Civil War). It tells the story well, and in great detail. The book left me with all kinds of feelings and observations. The most disturbing was the overwhelming tragedy of so many lives lost. Historians estimate there were approximately 630,000 deaths. More American lives were lost in this epic engagement than the two world wars combined. In addition hundreds of thousands of men went home handicapped for life with missing limbs and suffering from the mental anguish brought on by the horrors of war.

Below is a brief comment from the review by goodreads.com.

Published on the 125th anniversary of Lee’s surrender at Appomattox, this masterful account of the Civil War brilliantly captures the essence of the highly regarded Time-Life Books series in one incomparable volume. Compellingly replays the key turning points of the war as well as the small day-to-day events.

390 illustrations, photographs, and maps”.

You may be wondering why an investment newsletter is even discussing this subject. The answer is because another element of the book struck me, an element that lingers still.

It concerns three of the primary generals of the war, George B. McClellan and Ulysses S. Grant of the Union armies, and Robert E. Lee of the Confederate armies.

It’s about the personalities of the generals, and their strategies and tactics throughout the war. First McClellan. General McClellan was considered to be a great organizer and very detail oriented. He guided the “Army of the Potomac” in the early years of the war, building a potent fighting force.  The downside was his cautious nature (some said too cautious). His strategy and tactics never led to any decisive victories against the Confederates much smaller army. For his lack of effort and success he was sacked by President Lincoln. In fact he was sacked twice by Lincoln.

General Lee on the other hand was a brilliant tactician, leading the Confederate armies to many victories in the early years of the war, even though the Confederate army was much smaller than the Union armies, not to mention commanded less firepower and fewer supplies. These disadvantages persisted throughout the war, in which Lee and the South persevered four long years and even brought battles to Union states and nearly to the heart of the Union itself, Washington D.C.

This brings us to General U.S. Grant. Approximately midway through the war he was placed in charge of the Union armies. Grant is remembered not for being a brilliant tactician like Lee, but more for being an aggressive general who pressed forward in spite of setbacks or losses. (And his fighting troops suffered grievous losses throughout the war)

All of which leads to this. Investing in the securities markets is much like a long term military campaign. There are times when we need to be aggressive, as in a Bull Market like we have experienced and continue to experience, since March 2009. Maybe not as aggressively as General Grant, but more with the precision of a tactically minded General Lee.

However there are times we need to be more defensive minded and even retreat from the markets, times like the 2008 market meltdown, and before that 2000 – 2002. Be certain to include a protective strategy in all you do.

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