Daily Commentary

Providing succinct, entertaining and savvy thinking on global capital markets. Our goal is to provide discerning investors the most essential information and commentary to stay in tune with what's happening in the markets, while providing unique perspectives on essential financial issues. And just as important, Fisher Investments MarketMinder aims to help investors discern between useful information and potentially misleading hype.

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Put Your Smugness Away. You Are Not Too Clever to Be Conned.

By Michelle Singletary, The Washington Post, 2/21/2024

MarketMinder’s View: If you think you are immune to scams, give this a read. It relates how a personal finance writer admitted to being conned out of $50,000: “[M]oney she handed over to swindlers in a shoe box. Charlotte Cowles shared how scammers pretending to be from Amazon, the Federal Trade Commission and the Central Intelligence Agency frightened her so badly that all her usual skepticism was overruled. She was convinced she and her family were in ‘imminent danger.’ Since Cowles’s revelation, media outlets have been pointing out where the con could have been detected had she remained calm. Then she might have questioned the request for cash, or the probability that it really was the CIA, FTC and Amazon calling. And, no, the government won’t ask you to pay money to avoid being arrested.” The author—another personal finance writer—then recounts how she fell victim to a con artist pretending to be a bank manager, who (quite cleverly) got her to divulge her ATM card’s PIN after gaining her trust even when the crook stole her purse. Many readers wrote in to say the signs were obvious and they wouldn’t be fooled so easily. But rather than think this could never happen to you—who would ever fall for that! (in retrospect)—we think a better takeaway from these cautionary tales is being aware of how they operate. Because it could happen to you. But if you know what to look for—and how scammers prey on your emotions—you can be better prepared to catch cons in the moment when it counts most.


Lessons From Japanโ€™s Three-Decade-Long Nikkei Disaster

By James Mackintosh, The Wall Street Journal, 2/21/2024

MarketMinder’s View: With Japan’s Nikkei stock market index flirting with highs (in yen) last seen 35 years ago, this is a pretty good look at what it means—and doesn’t mean—for investors (though we quibble with the notion AI enthusiasm is driving stocks). First, the article helpfully critiques the Nikkei’s atrocious index construction, which arbitrarily weights constituents by their stocks’ price—making it as broken as the Dow Jones Industrial Average. A badly flawed index hitting some milestone isn’t really anything to celebrate. (Also, in showing why price-weighting isn’t fit for purpose, it uses some specific stocks as examples, so please keep in mind that MarketMinder doesn’t make individual security recommendations.) Next, the article also notes the Nikkei’s price-only milestone ignores dividends. Taking dividends into account, the Nikkei’s total returns surpassed its 1989 high in 2021—which passed without incident. Making more of a less meaningful measure renders any victory lap rather hollow. The upshot? While it is momentous that Japanese stocks are on the cusp of erasing the post-bubble crash, “The real reason to celebrate is psychological, as Japan bids farewell to the hangover from that bubble. Forget the nominal price of a defective index, and look at the real changes in the country.” For a further retrospective and investment takeaways, please see our commentary last year, “Japan’s Resurgence in Perspective.”


Germany Slashes 2024 Growth Outlook

By Staff, Deutsche Welle, 2/21/2024

MarketMinder’s View: On the heels of the Bundesbank warning yesterday about further German GDP weakness in Q1, today “The German Cabinet has approved an economic forecast revising growth down to 0.2% this year — well below a previous forecast of 1.3%.” Ministers cited (allegedly) weak global trade and global uncertainty for the downgrade. While this may seem dire, for investors, the question is whether any of this is new for markets. In our view, after two years of recession warnings and scattered GDP contractions, it lacks surprise power. We think German markets hit record highs today (per FactSet) not despite economic contraction but because they pre-priced it and moved on. Particularly since forecasters no longer see “widespread and lasting decline” as likely. Those outlooks are catching up to this point: Reality is turning out better than feared, which is all stocks need to keep rallying. Also underappreciated here: political gridlock. The article argues “... frequent public disputes among Germany’s ruling coalition parties were unsettling for business.” But the infighting means less legislative uncertainty for businesses—not more. While perhaps frustrating and weighing on sentiment, because they can’t agree on much, the status quo is left intact, giving businesses greater visibility to plan and invest. That most see this negatively is bullish for stocks.


Put Your Smugness Away. You Are Not Too Clever to Be Conned.

By Michelle Singletary, The Washington Post, 2/21/2024

MarketMinder’s View: If you think you are immune to scams, give this a read. It relates how a personal finance writer admitted to being conned out of $50,000: “[M]oney she handed over to swindlers in a shoe box. Charlotte Cowles shared how scammers pretending to be from Amazon, the Federal Trade Commission and the Central Intelligence Agency frightened her so badly that all her usual skepticism was overruled. She was convinced she and her family were in ‘imminent danger.’ Since Cowles’s revelation, media outlets have been pointing out where the con could have been detected had she remained calm. Then she might have questioned the request for cash, or the probability that it really was the CIA, FTC and Amazon calling. And, no, the government won’t ask you to pay money to avoid being arrested.” The author—another personal finance writer—then recounts how she fell victim to a con artist pretending to be a bank manager, who (quite cleverly) got her to divulge her ATM card’s PIN after gaining her trust even when the crook stole her purse. Many readers wrote in to say the signs were obvious and they wouldn’t be fooled so easily. But rather than think this could never happen to you—who would ever fall for that! (in retrospect)—we think a better takeaway from these cautionary tales is being aware of how they operate. Because it could happen to you. But if you know what to look for—and how scammers prey on your emotions—you can be better prepared to catch cons in the moment when it counts most.


Lessons From Japanโ€™s Three-Decade-Long Nikkei Disaster

By James Mackintosh, The Wall Street Journal, 2/21/2024

MarketMinder’s View: With Japan’s Nikkei stock market index flirting with highs (in yen) last seen 35 years ago, this is a pretty good look at what it means—and doesn’t mean—for investors (though we quibble with the notion AI enthusiasm is driving stocks). First, the article helpfully critiques the Nikkei’s atrocious index construction, which arbitrarily weights constituents by their stocks’ price—making it as broken as the Dow Jones Industrial Average. A badly flawed index hitting some milestone isn’t really anything to celebrate. (Also, in showing why price-weighting isn’t fit for purpose, it uses some specific stocks as examples, so please keep in mind that MarketMinder doesn’t make individual security recommendations.) Next, the article also notes the Nikkei’s price-only milestone ignores dividends. Taking dividends into account, the Nikkei’s total returns surpassed its 1989 high in 2021—which passed without incident. Making more of a less meaningful measure renders any victory lap rather hollow. The upshot? While it is momentous that Japanese stocks are on the cusp of erasing the post-bubble crash, “The real reason to celebrate is psychological, as Japan bids farewell to the hangover from that bubble. Forget the nominal price of a defective index, and look at the real changes in the country.” For a further retrospective and investment takeaways, please see our commentary last year, “Japan’s Resurgence in Perspective.”


Germany Slashes 2024 Growth Outlook

By Staff, Deutsche Welle, 2/21/2024

MarketMinder’s View: On the heels of the Bundesbank warning yesterday about further German GDP weakness in Q1, today “The German Cabinet has approved an economic forecast revising growth down to 0.2% this year — well below a previous forecast of 1.3%.” Ministers cited (allegedly) weak global trade and global uncertainty for the downgrade. While this may seem dire, for investors, the question is whether any of this is new for markets. In our view, after two years of recession warnings and scattered GDP contractions, it lacks surprise power. We think German markets hit record highs today (per FactSet) not despite economic contraction but because they pre-priced it and moved on. Particularly since forecasters no longer see “widespread and lasting decline” as likely. Those outlooks are catching up to this point: Reality is turning out better than feared, which is all stocks need to keep rallying. Also underappreciated here: political gridlock. The article argues “... frequent public disputes among Germany’s ruling coalition parties were unsettling for business.” But the infighting means less legislative uncertainty for businesses—not more. While perhaps frustrating and weighing on sentiment, because they can’t agree on much, the status quo is left intact, giving businesses greater visibility to plan and invest. That most see this negatively is bullish for stocks.