Curiosity@Intelsense
Weekly dose of learning
1.
Short-term reactions to a market event do not tell you anything about long-term implications
While the clarity provided by the US election result may have provided some relief, it should not embolden us into believing we know what will occur next, because the truth is that we have no idea.
No matter how uncertain the outcome of a particular event is, what we know with absolute certainty is that when the results are in we will discuss them as if they were an inevitability. And so it is with the US election, wherein reading the post-mortems of Trump’s victory we are led to wonder why the Democrats contended the election at all given how obvious its conclusion was.
Another favourite investor activity following an event such as an election is to look at the immediate financial market reaction, hoping it will provide us with a sure guide as to what lies ahead in the coming months and years. It would be fantastic if this were the case, but it isn’t.
Market activity around such periods is both self-referential and self-reinforcing. Market participants decide how they will react prior to the event (in the most recent case the so-called ‘Trump trade’) and then react in that way immediately after. It doesn’t provide us with any longer-term fundamental insights, as much as we might want it to.
2.
The tradeoffs of life
When you're young the one thing that you generally don't have is money. You can't travel the whole world because of money. You can't buy a house because of money. On and on. As a result, it's easy to overly focus on money. This is what I did throughout my 20s. I emphasized accumulation.
But, once you start to have some money, your priorities change. You can say no to things that you wouldn't have said no to before. You can make better choices. You can think more long-term. Ultimately, you can leave money on the table to maximize other metrics.
For some, those other metrics are respect and autonomy. For you, they might be something else. I have family members who have given up money and a more promising career to have more control over their time. I've seen friends do the same to be with their families. I don't think any of these choices are right or wrong, they merely represent a series of tradeoffs. The question is: are the tradeoffs you are making today appropriate for you? Is your attention focused on the right things? Are you maximizing your wealth at the expense of your health, your family, or your time?
Pic of the Week
The Chinese keep investing in global metal mines.
Thought of the Week
“What people say, what people do, and what they say they do are entirely different things.” ~ Margaret Mead
Video of the Week
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