Its Not Harry

Comment and opinion for retail investors in the UK

Mark Potter

YAP – Snippets

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Here are some of the most interesting points I gleaned from a Morningstar presentation last week, taking a look at prospects for European markets in the second quarter. Although the focus was Europe, the head of global equity strategy was on the call, so the macroeconomic content of the call was actually quite broad.

Naturally the message running through all the commentary was, stick of rock like, Trump’s tariffs. I actually thought it was quite bold of Morningstar (MS) to even offer a forward-looking commentary, and the European lead had to admit that he had needed to redo several of his charts in the days approaching the call, which was at the end of last week, and by today had already been overtaken to a certain extent by further vague prognostications from members of the US administration.

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YAP – in a plutocracy, best not to attack plutocrats?

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Some data from Bloomberg might be suggestive as to who persuaded Trump to back off on tariffs? (also very unscientific evidence for the merits of diversified investments!)

The tariff suspension decision was wholly consistent with the behaviour I predicted in my February Deep Dive. Personally, I think we are nowhere near out of the woods on this topic and the next actions of the Chinese will be interesting, Actions that may well be focused more on supply chain strangulation, especially of minerals,

It is also important to remember that tariffs are only one aspect of ‘The Madness of Nero’ (or his current incarnation). Even the winning of specially set up golf tournaments by the modern Caesar variant matches the well-attended (by order of the musician) lyre concerts starring the ‘talented in his own eyes’ Nero!

Expect more unpredictability, demonstrations of callous insensitivity, economic vandalism and a permanent degrading of the role of the USA in global affairs.

Investment markets will, as ever, come through it all largely intact but perhaps reshaped and with new and different opportunities. The plutocrats will make sure of that. Maybe we should be grateful?

YAP – Liberation Day

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Trump’s tariff announcement is one of the most significant (if not THE most significant) major political act by a ‘democratic’ leader with global economic consequences that we may ever experience. As a French professor working at Aston University in the UK described the announcement (more or less): “the most economically illiterate speech I have ever heard – full of lies”.

You will see much commentary in the general news media, but I would suggest that the real implications will be easier to see AFTER other countries have reacted and maybe after yet further retaliations from the White House vandal. This is in truth not a policy about global trade, but about raising taxes from anywhere except in the USA to allow the USA to tax its own citizens less. Global bullying and extortion, in short.

Insert expletive of your own choice

No-one will be surprised if global stock markets sell off sharply. The Dollar will likely depreciate too, so not good for UK investors with North American holdings.

I will comment in more detail in a video after a few days gap to allow (I hope) some sort of settled outcome to emerge.

I just took off my Skechers shoes, made in Vietnam and marketed in Europe by a US brand. Already sold at a what is locally a premium price, post tariffs, they likely will not sell at all. What a great opportunity for the Vietnamese to develop their own brands and sell direct into Europe. I already have more than a gut feeling that Trump has pushed Emerging Markets investments right back up to the top of the “Watchlist” selection tree!

The Chinese have been upset about US ‘hegemony’ for years. Trump likely just ended it.

MAGA – make America go away.

Deep Dive – April 2025

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Trump 2 – what we know so far and the implications for investors

My more diligent subscribers may have noticed a pause in my Your Attention Please (YAP) posts which was partly because I was on holiday (in England) for a week and partly because the current situation demands a more in-depth commentary.

I would not usually write this monthly longer missive as a commentary on recent market returns or the evolving ‘macro’ background, but my take on the current state of affairs is that the impact of the bizarre behaviour of the incumbent of the White House is so significant in terms of the ongoing assessment of the market valuation of investment assets, that a calm, logical, albeit personally biased review of what has happened so far could be very useful to my readers. I think readers pay me for an opinion and observations, not just to report data!

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YAP – Reaping what they sow

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Yesterday’s big market sell off was hardly a surprise. With an economic incompetent (to put it mildly) and his sycophants interfering big time in global trade and discharging the whole magazine of his revolver into the foot of the USA, it was eventually going to get through to investors, however MAGA they might be, that there coud well be a recession in the USA.

It has become fashionable to suggest that the markets are permanently propped up by the huge sums in index tracking ETFs and funds and also the personal wealth of the billionaire set. A further argument in favour of the market being a one way bet is that asset allocation decisions are more commonly made by algorithms than by humans these days. Those are valid arguments, in my opinion, but they have an extension: when entities (be they people or machines) are in control of very large amounts of money in the equity markets, if they are triggered to a negative inflection point, the sell off will be dramatic.

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