Market Volatile As Strategy Questioned

Strategy is about setting yourself apart from the competition. It’s not a matter of being better at what you do – it’s a matter of being different at what you do.” Michael Porter

When kids are very young, parents introduce games to them as a way to keep their minds engaged. When I was young, my brother enjoyed chess while I preferred checkers. Chess is considered the superior strategic contest. As society has evolved, chess is now closely watched as the best players in the world often play the most powerful computers with the latest and greatest technologies like artificial intelligence, neural networking, etc.

One game both my brother and I enjoyed many years ago was Risk, which is a board game based on armies, warfare, and geography. He also progressed into Dungeons and Dragons, which wasn’t my cup of tea, as I preferred active sports like basketball and baseball. Anyway, these games help people think about strategy. You see, if the strategy is sound, and the execution holds up, well, now you have something, especially when it comes to investing in specific companies. With that, let’s turn towards the market.

Over the past few days, we saw evidence of what makes the market such an interesting endeavor. With the events in Iran unfolding quite quickly, Tuesday and Wednesday proved that investors cannot decide what they want to do by the minute, let alone the week, month, year, or decade.

Before the market opened on Wednesday, futures were down nearly five hundred points as news broke that Iran had bombed a housing instillation in Iraq where US troops resided. Also on that day, we got news that an Ukrainian airplane, made by Boeing incidentally, was shot down in Iran. The plane killed all passengers aboard, including many Canadian citizens. (Naturally, we pay our condolences to those families who lost their loved ones in such a tragic event.) Two hours later, as investors were informed of the fact there were no casualties at the US housing base, the futures started to turn around. During the day, momentum strengthened and the market wound up ahead by over 100 points. Despair to delight in a matter of hours. None of this had anything to do with company profits, mind you.

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Disclosure: Yale Bock, Y H & C Investments, its clients, and the family of Yale Bock have positions in the securities mentioned in the blog,  Investing in securities involves risk and the ...

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