No. of Recommendations: 11
The challenge is that our response to uncertainty (qualitative) is dramatically more painful than our response to risk (quantitative).
Jim's numbers imply "risk", but if you examine them, demonstrate uncertainty. I don't disagree with most of his assessments and frankly am examining options from within the forest. That said, it is the uncertainty of the near term economic actions of the US (and its reflection in China's actions) which is giving conniptions to the equity, bond and forex markets.
Mimicking Jim's whistling as one walks past the graveyard, yesterday I picked up modest positions in four equities with the expectation that the world is not about to end forever (RIO ADR's which were selling at a discount to the RIO.asx which I already own, re-acquiring some VALE which I felt was over-bleeding, and a couple of somewhat bloodied US companies; Amazon and NVIDIA). So far, so good. but the total of the positions are not enough to really move the needle.
The renegotiation of trade deals is not necessarily a bad thing, but forcing them by blackmail and extortion against the rest of the world simultaneously is.
One of the challenges for me personally is when I am informed by my fellow countrypeople that "It's about time we have a good businessman running the country instead of politicians - I trust his business acumen". As a businessman, my word WAS my bond. I signed contracts all the time, but they really weren't necessary, as to me, a deal was a deal, and I was going to complete my agreement, contract or no contract. I find it appalling that people would award someone who clearly will abandon any agreement as soon as it no longer met his immediate needs with the title of "good businessman". This zig-zagging in his approach to the global trade crisis he created is not necesarily designed to create chaotic uncertainty, but that's the result when our apparent autocrat is shooting from the hip at whatever shiny object attracts his attention without knowlege of the subject and without planning.
Jeff
