Personal Wealth Management / Expert Commentary

Ken Fisher Discusses President Biden's Infrastructure Plan

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher discusses the potential economic and stock market impact from President Biden’s infrastructure plan.



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Ken Fisher doing hand gestures time to time explaining.


Ken Fisher: President Biden recently signed the infrastructure bill into law. All kind of people have all kind of views about what this will do in the economy, in capital markets. What it’ll do in the economy is much, much less than almost anyone thinks it will.

Ken Fisher: And I'll come back to that in a moment. But what it'll do in capital markets is even less than that now, as it relates to capital markets, not the economy.

I want to point out that simply, we have a long history of bills of all kinds passing through Congress and being signed by presidents. And we

have a long history of securities prices, which we can then measure to look for cause and effect.

And if you ever heard me before, you know that one of the things that I say repeatedly, over and over to you, is that capital markets are in the core business of pre-pricing all widely

known information such that when you get to the actual event, the markets have priced it already.

Ken Fisher: So, the actual event has pretty much no impact on security prices.

There's very little that gets discussed more than governmental legislation, whether it's tax packages, hikes or cuts debated long, long, long before they're enacted and signed by a

president, or these kinds of spending bills, whether it's on infrastructure or anything else. Think how long, how very long people have been talking about this infrastructure bill and what's in it and what's not in it, and what should be in it and what shouldn't be in it.

Ken Fisher: And this part's good and that part's terrible. Oh my gosh. That all gets priced in advance because it's so widely discussed. Now. Therefore, what I'm going to tell you is it

has pretty much no impact on security prices. Pretty much none.

That's hard for people to accept because it seems like it's big and important. But markets pre-price that stuff just like lickety split.

Ken Fisher: In the real world, all of this is less. And I've talked about this at some length in writing and also in some of these videos in the past, because in today's day and age, a lot of this stuff, once you pass the legislation, is actually hard to do.

Ken Fisher: It's actually hard just to get her done. If you think of roads and bridges, tunnels, rerouting something, building something that has to go into the ground with footings and covers big distances, all this stuff takes long planning, heavy

permitting from so many agencies.

Ken Fisher: I'm going to tell you a little story. I used to live right next to Portland, Oregon. And there's an antiquated bridge there. The I-5 bridge, major north-south freeway from Seattle all the way down to Los Angeles, a major trucking route.

Ken Fisher: That bridge, they've been trying to replace that bridge for close to forever. From before I moved there to after I left there. And they never could do it. Why? Because today, you need two states, federal government, cities, counties, multiple agencies of all those things, all of whom are union workers, to all agree that this is what we should do.

Ken Fisher: It's very hard to get that. Permitting, environmental concerns, engineering concerns, design concerns. Never could get that one done. Someday, maybe. My point is, in infrastructure attempts at the past, a lot of what is planned never happens. Because by the time you would ever get through that permitting process, another Congress and another Congress and another Congress changes it.

Ken Fisher: How much of that will happen

this time, I don't really know.

But I know that it will be far less

than the actual bill that went through Congress. Now, there's a lot of stuff in that bill that's what I would view as strange, and a lot of that stuff also will take time. It's more likely some of the strange stuff gets spent than some of the stuff that is more vanilla infrastructure.

Ken Fisher: But regardless, there will be less in the economy than people have read in the story, which is another reason why it isn't that big a deal.


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Ken Fisher finished talking, and a series of disclosures appears on screen: “Investing is Securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice or a reflection of the performance of fisher investment or its clients. Nothing herein is intended to be a recommendation or a forecast of market conditions. Rather it is intended to illustrate a point. Current and future markets may differ significantly from those illustrated here. Not all past forecasts were, nor future forecasts may be, as accurate as those predicted herein.



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