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Josh Brown: How Geopolitical Threats Affect The Stock Market
FYI: Godspeed to all of those souls who’ve been injured, killed or have lost loved ones this week – by my count the number is over 700 casualties and counting, between the two affected regions. Tonight we’re going to talk about how geopolitical threats affect the stock market. Regards, Ted http://www.thereformedbroker.com/2014/07/17/how-geopolitical-threats-affect-the-stock-market/
I was doubtful about the potential usefulness of this article, saying to myself that it most likely was yet another exercise in the "firm grasp of the obvious". I was pleasantly surprised to see that it provides some interesting insights. Among them:
"All stocks can get hit, of course, but the ones that deserve it get it the worst. Geopolitical events have a bizarrely just and equitable way of meting out punishment precisely where it’s most deserved in the stock market. No one knows why this is."
"Each time is different, by definition every one of these episodes brings with it a set of variables and unique dynamics that no investor has a readymade answer for in advance. Models, frameworks, heuristics and rules of thumb will be totally useless here. Awareness of this digestive process, on the other hand, will be priceless."
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Regards,
Ted