This month I am offering for your enlightenment one of my small collections of bits and pieces of information I have picked up from my extensive specialist media consumption over recent weeks.
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Deep Dive – May 2026
In this article, published slightly early as the facts change so quickly that it might be stale in a few days, I want to follow up on my April mid-month post comment stating that I believe that whatever behavioural factors are driving stock market valuations, in the end fundamental factors will serve to restore prices to levels that make sense in an investment world where owning one sort of asset is always at the opportunity cost of owning another with different risk and return characteristics. In other words, an overvalued asset class will always eventually be sold off to buy into a cheaper one – we just don’t know when that will happen.
What I thought might be useful would be to list out some of the fundamental data that suggest that equity markets have become detached from reality. You can make a judgment as to what, taken all together, this information implies for the immediate future and whether or not those implications would prompt action on your part to defend or enhance your personal wealth.
Mid-month Musings – April 2026
Optimism or baked in behaviour?
Readers will have no doubt noticed, probably with relief, that however absurd the latest Truth Social post from Trump is, however counter-productive US policy is, however belligerent Israeli and Iranian leaders remain, whatever the direction of the oil price or data on tanker movements, stock markets have and are taking everything swimmingly.
Perhaps that seems strange to you? You would not be alone.
The conventional wisdom
Most experienced stock market investors would tell you that what happens in the global economy is useful in assessing the long term direction of asset valuations but really has no direct impact on short term share price movements unless that news indicates a systemic or all-encompassing change in the climate for business.
The shorter term valuation of shares should logically depend upon current company profitability, or at least expected future earnings, in the case of equities, and the trend in interest rates when it comes to fixed income stocks.
This might be the logic that should be applied currently. The markets are assuming that the war will be short lived and although oil prices have shot up with all the implications we are familiar with, this is taken as short term only and will not impact corporate profitability and perhaps only slightly delay the previous trend of reducing interest rates.
Deep Dive – April 2026
(published early as I am having a minor operation on April 1st)
Totally Reckless Uncontrolled Malign President (TRUMP)
I have written earlier this year that the main geopolitical risks were Trump, Trump and Trump and the conduct of the Israeli/ American war with Iran has been such as to make even the most experienced independent ‘talking head’ whether a political, diplomatic or military commentator admit that they cannot detect any strategic plan, understand the USA’s actual objectives or even believe that what the President writes on Truth Social even amounts to the policy of anyone other than the man himself at that very moment in whatever mental state he happens to be and with whatever most recent influences have fed his brain.
This is a state of affairs that seems almost beyond belief but I think that some news organisations either have not grasped the reality, or feel that that they should not risk suggesting anything is other than normal and that the US Secretary of State really travels the world with a real idea of what US policy on conducting the war will be tomorrow morning. I imagine that he actually finds out what policy he is supposed to defend by reading Truth Social when he wakes up.
I could write many thousands of words telling you what I think is really happening and why, but that is not the purpose of this blog. Investors are interested in the likely consequences of this state of affairs in terms of asset values in the near term and also beyond that. Here are my observations on that topic. I do have to touch a little on the actual events but will do my best to stick to facts as opposed to opinions about what will happen next in the Middle East.
Deep Dive – March 26 – Iran War Edition
This article will as promised attempt to assess some probable consequences for investors of the US and Israeli attacks on Iran.
Looking for a precedent
Given that I was a teenager, just into working life, when the Yom Kippur War of late 1973 kicked off, it is no surprise that it is firmly printed in my memory. I specifically recall buying petrol for my 50cc moped with a ration book! That time period has plenty in common with what might be developing now, although it must immediately be noted that there have been some distinct structural changes in the global economy over the more than half century that has elapsed, more of which later.
As a starting point let’s take advantage of AI to get a summary of what happened then. Here is text from MS CoPilot, lightly edited by me.