Giving Credit Where Credit Is Due

I spend a lot of time bashing the media for fear-mongering, pandering to mankind’s propensity to run its mind to the dark side. You know … if it bleeds it leads. The tendency for them is to inundate us with stories, lacking in perspective, that lead us to make rash, unprofitable investment decisions. This week’s cover story in Barron’s Magazine (“The Trade War … 5  reasons Not To Panic.”) is exemplary of the good that the media can do by giving the public a thoughtful examination of the facts and perspective. It deserves your consideration. 

My last post, ‘The only reason to keep the stock market open is to see how foolish people can be,’ was a more cursory attempt to calm people down. Barron’s work on this topic is a significantly deeper dive. Good job Barron’s.

Caveat Emptor

I hate to talk individual stocks here. We’re a counter to media malpractice. Sometime it is hard not to get into individual names, especially for purpose of illustration (an illustration of irrational pessimism). As such, I point out a Chinese equity that I own and that is mentioned in the article, Ali Baba (BABA).

After reporting a stellar quarter last week, the stock has been pummeled on trade war news. Other than it being a Chinese company I’m have trouble understanding how their marketplaces and secular growth opportunities are affected by the the current (US Chinese) trade spat. Divya Mathur, quoted below seems to share my belief.

“Divya Mathur, co-manager of global emerging markets strategy at asset manager Martin Currie, is looking to add to those with strong franchises unaffected by trade or that are able to raise prices to offset tariffs. Alibaba Group Holding (BABA) and Tencent Holdings (700.Hong Kong), two stocks widely held by U.S. investors, could face near-term pressure as investors shed China-related stocks. But Mathur would use pullbacks to add to the companies, citing their long-term growth prospects, as they capitalize on the millions who use their platforms and reap benefits of investments they are currently making in emerging technologies.”  Barron’s 5/18/19

Bottom Lines

Barron’s deserves credit as trade is an important market concern these days. This too will pass. Stay the course.