The writer is chief market strategist at Jefferies
It was shocking to see how gloomy so many investment professionals have become over the past two months. Countless clients, colleagues and competitors simply could not disconnect their disturbance over US political events from their fiduciary responsibilities.
These folks, after being radicalised by the mob of macro intelligentsia, spent their days predicting US policy failures rather than stoically focusing on generating returns on capital. Emotions should never be a part of the trading process. Just ask the king of dispassionate investing, Warren Buffett. “People have emotions, but you’ve got to check them at the door when you invest,” the investor said at this year’s Berkshire Hathaway annual meeting.
For the moment, we have too many investors spinning themselves into a frenzy. They opine on the risks of empty shelves at Target, a return to 1970s-style stagflation, the demise of dollar dominance, the end of the independence of the Federal Reserve and, the latest worry of the day, a debt-induced bond market collapse.
I have spent the past couple of months trying to push back on all the politically-charged negativity. While others were issuing recession forecasts and calling the end of US exceptionalism as a result of trade tensions, I argued that US President Donald Trump’s tariff announcements should be seen through the lens of game theory and its deployment in negotiations.
