Well, Cameron Crise is out with his latest daily missive and methinks he’s falling into the same trap as a whole lot of other folks when it comes to coping with the schizophrenic news cycle.
Just because you can’t keep up with it, doesn’t mean it’s “noise.” It just means it’s frustrating. But a lot of things are frustrating. For instance, the fact that the electricity bill keeps showing up in my mailbox every month like fucking clockwork is frustrating. But I can’t stop paying attention to it.
Do note that I like Crise’s stuff. That said, this is just silly:
Regardless of what you think about the personality or politics of Donald Trump, at this juncture it’s difficult to see his presidency as anything more than a litany of episodic distractions.
No Cameron, his presidency is a lot more than that no matter which side of the argument you’re on.
Let’s look at it from both extremes:
- If I’m a die hard, red-MAGA-hat wearin’ Trump fan, then this is the most transformational President the country’s ever had (in a good way) and the concerted effort to throw him out of the Oval Office is one of the greatest tragedies in the history of the union.
- If I hate Trump and think he’s a Russian spy, then this is the most transformational President the country’s ever had (in a bad way) and the concerted effort to throw him out of the Oval Office is one the most important crusades in the history of the union.
Either way, this is anything but “a litany of episodic distractions.” A “litany of episodic distractions” is how you would describe commercial breaks during an NBA playoff game.
Also, Crise seems to fall into another trap: that of not being able to realistically define “longer-term investors.” If your definition of “longer-term investing” is being a Bogle disciple from the time you’re 18 and your holding period is from 18 until whatever date ends up following the “—” on your tombstone, then sure, it’s all noise. Every single last bit of it.
But obviously you can’t define “longer-term” as “from now until I die.” That makes no sense. If you never monetize your holdings, then all you’ve got are numbers on a screen or on a monthly statement.
All of that aside, the following is half-decent and we’ve added some charts from a few previous posts to give it some visual flair. Enjoy.
Last week’s sharp decline in global equities already feels like ancient history. While a few weak hands may have been thrown to the lions, for the most part the entire episode now looks like little more than a distraction. While bread and circuses may provide entertainment and something for the media to write about, traders would to well to ignore them and focus on their process.
- Regardless of what you think about the personality or politics of Donald Trump, at this juncture it’s difficult to see his presidency as anything more than a litany of episodic distractions. “Trump headlines” attract eyeballs, so unsurprisingly we get an awful lot of them. At this juncture few if any have had a lasting impact upon financial markets.
- There are plenty of distractions elsewhere, too. Somewhat lost amidst all the “one belt one road” fandango in China is that the mixture of monetary conditions has changed. Market interest rates are going up and the yuan is going down. Is that a good thing for a world in which export growth has peaked, if only temporarily? Possibly not.
- Even the Fed is not immune to the lure of noise. While the FOMC has a relatively simple policy framework, they have inundated the market with a dizzying array of statements, projections, schematics, minutes, and speeches that sometimes require a doctorate in semiotics to interpret.
- At the same time, focusing on high frequency data trends can lead policy-makers on a road to nowhere. I calculate that wireless telecom services are currently subtracting 0.3% from the y/y reading on core CPI. Should the Fed really adjust its policy outlook because Verizon is offering an unlimited data plan? The bond market appears to think so.
- If you are a short-term trader, then the noisy entertainment of the market arena is an integral part of your process. For longer-term investors, however, the roar of the crowd (or the Twitter timeline) can offer relatively little. It’s far better to leave that forum to the day-trading gladiators.