US debt, the yen carry trade, global warming, labour interruptions, US Social Security’s potential future insolvency, Big Tech antitrust battles, declining birth rates – what do they all have in common? That they can’t have much real impact on stocks.
Yes, you read that right! Stocks are neither myopic nor far-sighted. They look about three to 30 months ahead – ignoring most super-short-term chatter and all ultra-long-term conjecture. Let me show you.
Financial commentary often amounts to mixes of very near-term events. Or they feature far-flung far-future speculation … especially if it involves doom and gloom or hopes of huge riches. None of this directly helps navigate capital markets.
Markets care little about what already happened, happens tomorrow – even less about what probably happens a decade hence.
Consider recent headlines: Yen carry trade talk. Earnings reports. Inflation numbers. US Federal Reserve blabber. Daily dissection of market wiggles. Is all that interesting? Maybe to you. Or me. But rarely to stocks. Why?
Consider: The stock market is a marvellous pricing mechanism – its basic job. It incorporates all publicly available data, opinions and forecasts into a current single price – near-instantaneously!
Yes, short-term prices can swing sharply. But such noise usually fades fast into prices far more accurately than you, I or anyone could come up with alone.
Also, much of what you read or hear isn’t really new. Daily stories often focus on economic or earnings data. That reflects the recent past – backward-looking realities which stocks largely and mostly already know and pre-priced.
How results compare to expectations may swing stocks briefly, but lasting effects are rare. Perhaps you can glean something from diving into results, trends or management commentary. But doing so ignores that stock prices already did that for you better than anyone can consistently.
Don’t fear the far future, either – at least anything further than about 30 months away. Stocks don’t! Why? Because further out, the future gets truly impossible to predict. Stocks only deal with that when it gets closer.
Take often-cited US Congressional Budget Office estimates. In 2011, the CBO projected 10-year Treasury yields would average 4.8 per cent over the 2011-2021 period, with the US dropping $940 billion on annual interest payments by 2021.
The reality? The 10-year yields averaged just 2.1 per cent, with 2021’s net interest outlays totalling about $350 billion. Whoops!
Or remember peak oil? Early this century, most “experts” posited conventional oil production had already peaked. Then, with a new technology fracking boom no one foresaw, America gushed crude.
Focus has since shifted to peak oil demand. The International Energy Agency claims it will come in 2029. Goldman Sachs says 2034. Exxon expects constant oil demand through 2050.
Even if one of them is right, oil demand won’t vanish thereafter. Certainly not in the next three to 30 months. Ignore it all. Stocks will.
Ditto for demographics, climate change and the dollar’s reserve currency status. I am not saying all these aren’t important … sociologically. Or that they can’t impact stocks someday. But in the next approximately three to 30 months? Nope!
Climate change and demographic shifts play out over decades, not months or years. Global de-dollarisation? This isn’t a real negative of import, given most countries are increasing dollar reliance.
China’s yuan – often feared as the buck’s replacement – accounted for a puny 2.3 per cent of global central bank reserves through 2023, versus the greenback’s 58.4 per cent. If that ever changes markedly, it won’t happen soon.
Even hullabaloo around Big Tech’s government battles is ultra-long term. August’s Google antitrust decision was four years in the making – and far from over. Appeals still loom for years!
Predictions on how these events will play out rest on current information. In the years or decades it takes for them to play out, our world will change in unimaginable ways.
Predictions’ underlying past assumptions get whacked, almost always. Ultra-long-term forecasts flop. Stocks never bother with them.
How does the outlook for that three-to-30-month sweet spot look now? Stocks’ swift rebound from mid-summer’s swoon tells you it is good for the economy when so many fear recession. And fear is bullish.
Stealth risks I said to monitor in January haven’t erupted. Hooray! Inflation has cooled, supply chain snarls are long gone. US lending is growing moderately. America’s money supply’s boom-turned-bust “contraction” stabilised smoothly.
If 2025 doesn’t bring big negatives, ones that haven’t been foreseen – and hence stocks haven’t pre-priced already – stocks should keep faring moderately well.
So, the next time you hear anyone fret something next month or 20 years distant, tell them to refocus – like stocks always do.
Ken Fisher is the founder, executive chairman and co-chief investment officer of Fisher Investments, a global investment adviser with $280 billion of assets under management
FIGHT CARD
Sara El Bakkali v Anisha Kadka (Lightweight, female)
Mohammed Adil Al Debi v Moaz Abdelgawad (Bantamweight)
Amir Boureslan v Mahmoud Zanouny (Welterweight)
Abrorbek Madaminbekov v Mohammed Al Katheeri (Featherweight)
Ibrahem Bilal v Emad Arafa (Super featherweight)
Ahmed Abdolaziz v Imad Essassi (Middleweight)
Milena Martinou v Ilham Bourakkadi (Bantamweight, female)
Noureddine El Agouti v Mohamed Mardi (Welterweight)
Nabil Ouach v Ymad Atrous (Middleweight)
Nouredin Samir v Zainalabid Dadachev (Lightweight)
Marlon Ribeiro v Mehdi Oubahammou (Welterweight)
Brad Stanton v Mohamed El Boukhari (Super welterweight
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Sweet%20Tooth
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WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
The years Ramadan fell in May
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How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
TO ALL THE BOYS: ALWAYS AND FOREVER
Directed by: Michael Fimognari
Starring: Lana Condor and Noah Centineo
Two stars
The specs
Engine: 3.6 V6
Transmission: 8-speed auto
Power: 295bhp
Torque: 353Nm
Price: Dh155,000
On sale: now
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The%20specs
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more from Janine di Giovanni
Zayed Sustainability Prize
Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
Day 3 stumps
New Zealand 153 & 249
Pakistan 227 & 37-0 (target 176)
Pakistan require another 139 runs with 10 wickets remaining
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
UAE currency: the story behind the money in your pockets
