Daily Commentary

MarketMinder’s View: Pay attention to the dates here. The titular 22 Japanese vessels that crossed the Strait of Hormuz did so “between Tuesday and Thursday.” That span included reports of fresh attacks on tankers in the waterway and US President Donald Trump’s declaration that the “ceasefire” is over, which preceded more attacks in the region. Yet despite renewed skirmishes, ships are still crossing. We suspect this is partly why oil hasn’t skyrocketed again, with Brent crude instead hovering in the mid-to-high $70s per barrel—miles below April 7’s high. Stocks, too, barely blinked. Headlines may look alarming, but markets seem to be seeing reality and the high likelihood things go better than feared over the next 3 – 30 months. For more, see Wednesday’s commentary, “On the Iran Flare Up.”

MarketMinder’s View: Fearing new prime ministers’ economic plans is a bipartisan tradition in the UK (see: Truss, Liz – 2022 mini budget of), and as always, we are politically agnostic and prefer no party nor any politician. But we note this because it shows political sentiment is low, with the abundant discussion of potential tax hikes raising uncertainty. It is all based on speculation and reading into likely incoming Prime Minister Andy Burnham’s past offhand comments and statements from the many, many Labour Party factions lobbying him over economic policy. Burnham himself hasn’t chosen a Chancellor of the Exchequer or announced specific economic policy plans. But the sheer discussion does appear to be hitting sentiment, as the survey here (and accompanying commentary) shows. Because stocks don’t operate in a vacuum, it is also fair to say markets are pricing in this chatter, setting a low bar for reality to eventually beat expectations. Despite all the handwringing, UK stocks are flattish in British pounds (to avoid currency skew) since outgoing Prime Minister Keir Starmer resigned last month. Maybe uncertainty weighs on risk-taking now, but as we get clarity on economic policy, markets likely continue moving on.

MarketMinder’s View: This is a good look at the psychology of that age-old mistake: buying high and selling low. It focuses on bitcoin ETFs, so we remind you MarketMinder doesn’t make individual security recommendations, but the mental trap can afflict all investors in all securities. In this case, a new study finds people who bought and sold bitcoin ETFs after their January 2024 launch performed significantly worse than the funds themselves. Now, this is a bit spotty, because it bases investors’ return estimates on fund flows. That gives you the timing of their bitcoin ETF trades but doesn’t tell you what (if anything) they bought after selling the crypto security and how that did. Yet the flows themselves are instructive: “From October 2024 through January 2025, as bitcoin lofted past $100,000, investors poured an astounding $20.7 billion into this group of ETFs. When bitcoin sank in February and March 2025, they pulled out more than $3.6 billion. Then, from May through July 2025, as bitcoin’s price sailed past $100,000 again, investors showered another $15.7 billion on these funds. From November 2025 through this May, as bitcoin’s price collapsed more than 30%, people yanked $6 billion out of these ETFs, locking in losses.” Why do people continue making these mistakes even as they know they should stay disciplined? “Buying a fund after it goes up is the natural thing to do; it feels good, because the rising price feels like validation. Selling after it goes down (or declining to buy more) also feels natural; losing more money is a scary prospect. It was obvious in January 2024 that the bitcoin ETFs would create huge demand that would make the price go up. ‘That resonated with investors’ intuitions,’ says [Morningstar analyst Jeffrey] Ptak. What wasn’t obvious, though, is that the price might already have risen in anticipation of that additional demand. ‘These narratives form, and people can’t resist them, and that bedevils people time and time again,’ says Ptak.” Indeed. Remember: When you base a trade on past performance and/or widely known information, your thesis is already priced in. Look forward, don’t get distracted by shiny objects, and keep your long-term goals front of mind.