E Another Tough Day For Markets

The stock market resumed its negativism today mainly linked to fear of inflation and higher interest rates, on the argument that the most dangerous thing to believe is “it's different this time.” It is never different except superficially. Over the weekend there was plenty in Barron's about how to protect yourself from both. I already mentioned Mirova Global Sustainable Energy, a sub of Paris-based Natixis, a fund manager. I noted that their top 10 holdings include two of my own big positions: Microsoft and Thermo Fisher Scientific, the latter of which is my largest US stock position. MSFT fell today as a tech stock to $243.83 but I am still ahead

Paris is where I learned about inflation as a young mom and part-time journalist with The Sunday Times, a British weekly. A mere stringer, I wound up on the front page when General de Gaulle decided he would not devalue the currency, then the French franc, after the student riots of May. 1968. It happened all the same, without his acceptance, and marked the end of Gaullism a few years later.

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Which tells you that inflation has dreadful political consequences. We were allowed to take francs with us on traveling to England because we weren't French and subject to exchange controls. We had a quota of francs for my husband, myself, and each of our tiny children so we could get rid of them before they lost more value. The dog did not get to travel with us because Britain barred foreign pooches, and we used some more depreciating francs to place it into a kennel near our apartment.

The fear here is not only because of the risk of investing. It is also about the risks to our COVID-19 recovery and the wildly gyrating data on personal consumption headlined by Ben Levisohn in the weekly, 5.5 standard deviations above its average. The new Fed is scary; the new Fed Treasury Secretary is indiscrete; the Biden Administration is committed to hefty and possibly unnecessary pump-priming. And commodities like oil and gas, copper, iron ore, and steel are pricier while simple chips for telephony and cars are in very short supply. This means inflation. Commodities are showing inflation risks.

Or to quote what Ben Levisohn almost wrote: “it's hard to predict, particularly about the future,” famously attributed to Yogi Berra.

As I write, having been frustrated again by a corporate result not showing up in my brokerage account with Schwab-TDAmeritrade-Think or Swim (a triple-negative because they no longer cover news as they have to pay for it, and brokerage is now supposed to be free). In fact, I am charged fees for trading even NYSE-listed ADRs and would prefer linkages to my holdings even if I have to pay to trade.

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William K. 4 weeks ago Member's comment

Indeed, again. And certainly it is possible to predict the past quite accurately, while the future is a lot harder to get right.

And it IS different this time, A different year and a different month. Same disasters the last fifty disasters, but different dates. So the fools are not totally wrong, except about the important details.