Daily Commentary

MarketMinder’s View: Some good sense in this piece, which does name drop a few individual companies, so keep in mind we don’t make individual security recommendations—our interest is the higher-level theme, which calls into question the wisdom of the push to broaden retail investors’ access to private assets. Look, large institutions aren’t like ma and pa; they have different time horizons and liquidity needs. So the idea of “democratizing access” is romantic, but a little off. So are the notions, as this discusses, that private assets have automatically higher returns and less volatility than public assets. Neither holds historically. They have less visible returns and volatility. That is it. And as noted herein, the diversification benefits are massively overstated, as private and public equity in the same sector likely behave similarly. All in all, liquidity is a vital factor to manage—especially in a later-stage bull market like now. Heavy weights to private equity can be a trap.

MarketMinder’s View: Is the opening line of this discussion of Korea’s frothy market intentionally paraphrasing The Sound of Music? We will leave that for you to decide. Regardless, this runs through recent market action in Korea, which we highlight for a couple of reasons. One, it is increasingly being seen as a sign investors are euphoric, which is sort of true. The trouble is, this market is heavily about two stocks, both in AI (both are touched on here, so please note we don’t make individual security recommendations). So in this sense, it is more a demonstration of the isolated froth in one area of the market—which also holds globally. The article runs through various regulatory actions aimed at reining in speculation in leveraged, single-stock ETFs, which is a noble cause in the sense these are tools of mass portfolio destruction, in our view. But we doubt this will succeed in corralling euphoric behavior in Korea. In our view, this is more a sign of behavioral traits to watch for elsewhere if hot sentiment continues to bubble up and becomes more broad-based.

MarketMinder’s View: This is a false fear. Yes, France is the only eurozone nation that hasn’t cut its debt (as a percentage of GDP) since the big COVID global government spending spree. Yes, there are projections this will reach 200% of GDP by 2050 and yes, the government has been gridlocked into inactivity, which the 2027 election may not resolve. But comparing French debt to GDP is a stock-flow mismatch, a useless comparison of something that only accumulates over time (debt) to the annual amount of economic activity (non-cumulative). Better to look to debt interest as a share of tax revenue, which French stats agency Insee put at a historically benign 10 – 11% in fiscal 2025. Markets aren’t showing there is a dire problem. 10-year French OAT yields are at 3.62%, down from March’s 3.84% high and in the same range they have been in for over a year. They still yield less than the default-risk-free US, and the spread over perceived debt-averse Germany is 0.68 percentage point, close to the average 0.58 in the past five years. (Data from FactSet.) If debt were problematic, none of those things would be true. Trust markets, not pundits and debt forecasts.