Politics & Investing

Comments

• hank

  March 10

  
• Mark

  March 10

  Boy howdy!
• larryB

  March 10

  I hate to sound like a broken record but what’s happening now is now normal politics. Not repugs vs dems, conservatives vs progressives. This is all about he who is openly seizing state power and tearing up the constitution vs the rule of law and democracy. There is a reason most of us don’t invest in authoritarian states ,,,, the markets here generally out perform for lots of reasons but some seem to be going away.
• WABAC

  March 10 edited March 10

  I'll add Zweig to the list of anodyne advisors (AA's) telling us there is nothing so new, or different, about the policy changes springing from the mind of one man that should cause us to alter from someone's definition of sound, disciplined, investing, i.e., the conventional wisdom.
  
  Jerome Powell outlined these changes just the other day:

  Looking ahead, the new Administration is in the process of implementing significant policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation. It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy. While there have been recent developments in some of these areas, especially trade policy, uncertainty around the changes and their likely effects remains high. As we parse the incoming information, we are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and are well positioned to wait for greater clarity.

  Are we only dealing with mere opinions about mere politics here? Seems to me that Powell is treating these policy changes as new facts to take into consideration. This got me thinking about the quote:

  When the facts change, I change my mind. What do you do, sir?

  And here we have The Quote Investigator's research on that quote: Dinky linky.
  
  He first turns to John Maynard Keynes:

  In 1924 John Maynard Keynes published an essay titled “Investment Policy for Insurance Companies” in “The Nation and Athenaeum” of London. Keynes contended that an insurance company must employ an active investment policy. The company must maintain constant vigilance and revise preconceived ideas in response to changes in external situations.
  
  Keynes penned a statement that partially matched the expression under examination. He suggested that a successful investor must be willing change an opinion when facts and circumstances change. Boldface added to excerpts by QI:1

  Unfortunately, it is not possible to make oneself permanently secure by any policy of inaction whatever. The idea which some people seem to entertain that an active policy involves taking more risks than an inactive policy is exactly the opposite of the truth. The inactive investor who takes up an obstinate attitude about his holdings and refuses to change his opinion merely because facts and circumstances have changed is the one who in the long run comes to grievous loss.

  Thus, Keynes expressed a similar idea, and he used comparable vocabulary, but his phrasing differed significantly. The existence of this passage highlights the possibility that there might be a closer match from Keynes that remains undiscovered.

  The QI then goes on to say that the earliest near version he can find can be attributed to Paul Samuelson. The QI has added the bold type in the following:

  KIPLINGER: Returning to this matter of how much inflation we can absorb effectively, you may remember that Dr. Sumner Schlicter at Harvard shocked, I guess, the American Public after World War II when he said some inflation was not only inevitable but perhaps also desirable to promote growth. My question is do you agree with that general assessment and if so, how much should we have and how much is acceptable?
  
  DR. SAMUELSON: I do agree with it and I suffer for expressing my agreement. Different editions of my textbook have been quoted. In the first edition I said a five percent rate is tolerable. Then I worked it down to three percent and then down to two percent and the AP carried a wire “Author Should Make Up His Mind.” Well when events change, I change my mind. What do you do?

  I cannot predict the outcome of the changes directed from Washington D.C. Nor can I say how long we will be engaged in those projects. I don't believe that the anodyne advisors can either. Following on from Powell's thoughts, I would like to be "well positioned to wait for greater clarity."
  
  The Quote Investigator does not have an article on the quote: "I made my money by selling too soon," which is attributed to Bernard Baruch, J.P. Morgan, and various Rothschilds, at least.
  
• BaluBalu

  March 10

  SPX is still much higher than Aug 5 low, which I take as a first indication of things to come.
• davidrmoran

  March 10

  yeah, yawn to most of these bromides --- this time is actually different in some important respects, and not just the valuations
• BaluBalu

  March 10 edited March 10

  Yes, very different in important respects.
  
  Coincidentally, last time Trump slump also started around February 19. Though the reasons this time are different, both times there was a realization that there is going to be a systemic and structural uncertainty.
  
  FOMC meeting is next week. I expect easing of QT, which would please both investors and the administration. So, we potentially have another six days of slump.
  
  Edit: small GTC buy orders triggered for me today.
• Crash

  March 10

  larryB said:

  I hate to sound like a broken record but what’s happening now is now normal politics. Not repugs vs dems, conservatives vs progressives. This is all about he who is openly seizing state power and tearing up the constitution vs the rule of law and democracy. There is a reason most of us don’t invest in authoritarian states ,,,, the markets here generally out perform for lots of reasons but some seem to be going away.

  Agreed! How much damage can be staved off until the next midterms, eh? And needless to say, the next election is no guarantee of change for the better. How many MAGAs are going to grow a brain and a conscience between now and then? I suspect we are living through destruction of a sort which, once terminated, will take us decades to recover from. There will have to be generation-wide deaths and new births. People who are properly taught to think critically and who are not infected by Orange and MAGA Kool-Aid. Also, Fixed Noise needs to be morphed into a reality-based entity.
• larryB

  March 10

  At Crash. You say “the next election is no guarantee of change” I would suggest that the next election is not guaranteed to happen. Think about that. Let’s say the polling predictions indicate a 25 seat gain for the pro democracy movement. Think crazy man won’t declare a national emergency and cancel the mid terms?
• Crash

  March 10

  larryB said:

  At Crash. You say “the next election is no guarantee of change” I would suggest that the next election is not guaranteed to happen. Think about that. Let’s say the polling predictions indicate a 25 seat gain for the pro democracy movement. Think crazy man won’t declare a national emergency and cancel the mid terms?

  Y'know, I believe you're right. It's not yet noon here, and I need a drink.
  
• larryB

  March 10

  It’s five o clock somewhere !
• Crash

  March 10

  
• Observant1

  March 10 edited March 10

  The thread was created to potentially prevent some folks
  from making rash investing decisions influenced by politics.
  Remember when Barrack Obama was elected and some of his detractors dumped their stock positions?
  Subsequent returns were much lower for these investors than if they had stayed the course.
  I'm very concerned by recent White House actions and Congress's refusal to check executive power.
  But I don't know what the "market" impact will be in 6 months, 1 year, 2 years, etc.
  Anyway, I'm moving this thread to Off-Topic due to several posted comments.
  Perhaps I should have started it there in the first place?
• hank

  March 10 edited March 10

  Thanks @Observant1
  
  Agree the thread was investment related as you originally posted it. Nice take by Zweig. Making major portfolio moves based on all the shouting from one side or the other isn’t wise. Don’t vote or express your outrage with your pocketbook. What good does that do? The other side isn’t taking their slimy paws off the money mill. Why should you or I?
  
  Yes, I think when threads run off topic they should be placed in off topic. Unfortunate here because Zweig’s point was salient.
• WABAC

  March 10

  I'll take responsibility for helping to drive the thread off topic by questioning the applicability of conventional wisdom given the factors Powell commented on.
  
  If the OP was not prepared for disagreement with Zweig's anodyne advice then the thread should have been placed here to begin with.
  
  To me it seems that people like Zweig have some Platonic Ideal of Investing Virtue where it's just not cricket to look around and say: "This whole setup seems hinky to me. I'm heading for the door." I'm sure the Smoot-Hawley era had its share of Zweigs.
  
  I have made moves in my IRA to get to that happy place where I need not hurry while waiting for "greater clarity."
  
  
• JD_co

  March 10

  None of this is normal. Erratic behavior and senseless policies yield poor results.
  
  There are some who believe that our grand leader is gunning for a US market collapse. That it's all part of the plan.
  
  Good times.
  
  Makes me want to slip across the northern border, throw on a maple-leaf hoody and try life on the other side. They have universal healthcare there, right? Gotta work on my canadian accent, eh.
• hank

  March 10 edited March 10

  ”Makes me want to slip across the northern border …. “ - Just don’t tell them where you came from. We are not well liked up there …
  
  Trump would like a quick recession & market decline. Appears he’s pushing all the “right” buttons to induce one. He’d name it the “Biden / Harris Slump.” Then he’d expect to get the economy fired up by midterms (as @Junkster hypothesized in another thread). Maybe Trump is on to something. But ISTM that’s a big gamble - playing with fire. I’d be more concerned about over-stimulating on the upside than with chances for another episode like ‘07-‘09.
  
  Thanks for the image @WABC. you’ve posted it before. Never grows old.
• WABAC

  March 10 edited March 10

  @JD_co, I find it sufficient to cope with his expressed desire to return to the age of McKinley.
  
  Not to mention all of the other things he says out loud.
• Sven

  March 10

  I for one has a hard time to see this year will end well with he possibility of a soft landing. Inflation alone will keep the already expensive stock market from advancing further.
  
  Adding tariffs to Canada, Mexico, and China is like adding fuel to fire. Yes, so much wins ! The counter-tariffs have not play out yet and it will be much worse on both sides when it is done. Making American Alone Again will get very expensive.
  
  Got to love Scott Bessent’s comment “access to cheap goods is not the essence of the American Dream.” What about cheap oil ?
• Observant1

  March 10 edited March 11

  "If the OP was not prepared for disagreement with Zweig's anodyne advice
  then the thread should have been placed here to begin with."
  
  I don't have an issue with anyone who disagrees with Zweig's advice.
  Everyone can invest as they see fit (hopefully with a cool head).
  This thread was moved solely because of some highly partisan comments.
  I actually agree with some of the comments but this doesn't mean that it is
  appropriate to post them in the Other Investing or Fund Discussions categories.
  Wasn't there a major kerfuffle in this forum several years ago related to politics
  which led to the creation of the Off-Topic category?
• Crash

  March 11

  Where should I put my money???
  "Growing number of experts say that Trump is providing Russia with intelligence against Ukraine. Russian forces in Kursk miraculously had extremely precise coordinates for Ukrainian troop locations, logistics and ammo depots in Kursk after Trump cut off aid. A day before, Russia was on the back foot."
  https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:mxc7liuon6iq5gzapmmwkq22/bafkreibtzwf7zlfnupjqiuus6ksrgpgyz7lmfsntludfefhtbkkbjwpysu@jpeg
• Crash

  March 11

  
• larryB

  March 11

  @Observant1. With all due respect, one can be partisan and right. What’s going on is not normal and it’s not business as usual. Not for business and not for investors. And burying discussions about the new investment / business reality in off topic is doing a disservice to this community.
• WABAC

  March 11

  larryB said:

  @Observant1. With all due respect, one can be partisan and right. What’s going on is not normal and it’s not business as usual. Not for business and not for investors. And burying discussions about the new investment / business reality in off topic is doing a disservice to this community.

  I think @Observant1 should feel free to place his posts where he is comfortable having them. His post is hardly buried. I found it. You found it. Multiple people have viewed it.
• hank

  March 11 edited March 11

  ”I found it. You found it. Multiple people have viewed it.”
  
  295 views and rising …. a winner!
  
  Sometimes the posts in OT have more investing value than some over on the investing side.