Lessons Learned in Crisis Management: Sept. 11

I was cooking breakfast, an eye on the TV, when the announcement came that an airplane had hit the World Trade Center.  Within minutes, that announcement morphed into the worst news I had heard since the death of JFK.

I threw out breakfast and drove to the office.

I went immediately to my computer and wrote what I have long called a “hand-holding message.”  I quickly posted it to our Letters Library. 

I was about to order an email broadcast to clients when a long-time Canadian client, Robert Cable, copied me on the hand-holding message he was sending his clients.  His was better than mine. I pulled mine, posted his and ordered the e-mail blast.

I have not re-read Bob’s letter in nearly 10 years.  It is an extraordinary letter.  Someday, maybe Harvard Business School will use it as a case study in financial-crisis management.

By September 12, I decided that Bob’s message was too important to limit to Bill Good Marketing clients.  We pumped out 25,000 email copies.

Within a day or so, talking heads on CNBC were talking about a letter brokers all over the country were sending.  On Saturday morning, CBS Marketwatch plagiarized it.  Monday morning, the markets opened 500 points down and then in the next few months did what markets do—recovered.  But there were lessons learned. 

First read Bob’s letter, and if you want to learn more about this extraordinary writer (also an extraordinary advisor), here’s a link to one of his websites.

(See complete coverage of 9/11: Ten Years After on AdvisorOne.)

Bob Cable’s Letter

Today will never be forgotten.  The horrific and senseless attacks have caused unknown numbers of innocent people to lose their lives.  The impact beyond the lives lost may never be known.

I want to help you through this financially by outlining from experience what is likely to happen.

First, your guaranteed investments remain solid and safe.  However, there will be panic in the stock market(s) when they reopen.  At this point, I do not know when markets will again open for trading.  Every incident that causes a stock market panic is different.  But the reaction in the markets usually has a course that is strikingly similar.  So here’s where you need to sit back and think this through.  Here’s what the markets are likely to do.

In every panic, the market will open way down initially.  Please understand this: you cannot get out before this happens.  If you rush in to sell, you will most likely get a price that is around the worst of the day. 

Remember, I’ve seen this before.  In the past, those who got out, did so to make themselves feel better. As time passed and they looked back, they wondered what they could have been thinking to sell at such low (panic) levels.  The market, for some time, will likely be subject to wide swings based on the news of the moment.  But in every case of panic, the market has recovered.  I do not expect it to be any different this time.

Sure, there will be disruptions.  Some companies may shut down operations for a few days.  Most businesses will be impacted, some more than others.