Why so Much NoBull Focus on Politics?

Feb 13, 2024 | Finconomics 101, No Bull Economics

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Background

  • We were recently speaking to a top Wall Street analyst who covers the restaurant industry & he wanted our opinion about why there seems to be such a disconnect between stock performance and financial fundamentals. He thought many stocks under his coverage should be down big time, but instead they are up significantly.
  • Maybe a clue is provided by a top hedge fund manager who recently wrote a letter to his investors suggesting that the market was up big because of an anticipated win for Trump. His unique take went viral because everyone is searching for answers about the economy & markets in a world increasingly disconnected from reality.
  • The truth is that the Fed, the financial health of the U.S. government/$U.S., and increasingly volatile geopolitical woes are more influential on the markets than any other factor currently.

Comments

  • We are political agnostics with a strong desire to shrink the federal government so significantly that nobody will care who is president. We are far more comfortable letting a flawed market direct our economy than an inefficient government bureaucracy that is prone to compromise.
  • This reflects our belief that markets are a far more democratic form of government than elected & unelected officials who are funded & directed by special interest groups. If we leave them alone, free markets are even beyond the reach of the billionaire oligarchs to control for very long.
  • Finally, free markets provide a much better form of a republic than a U.S. Constitution which is constantly under siege from well-funded special interest groups.
  • You can count on the market to be guided by the pure, uncompromised logic of self-interest. We simply must enforce common sense laws that keep self interest in check.

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