It is said there are “no atheists in foxholes”. When things get desperate, we all like to imagine a better outcome on the other side of whatever nightmare is being endured. It is also the case that when facing challenges, a natural reflex is to cling to beliefs installed in us at a young age.
When writing Q&A On The Hong Kong Dollar Peg back in May, there was no inkling that trust between the police and much of Hong Kong’s population would fully break down. Today, there is a parallel with the 1992 riots in Los Angles…
In the mid-1950s, geologist M. King Hubbert theorized that “peak oil” would come when the maximum rate of extraction of petroleum was reached, after which the production of oil would enter terminal decline. At the time Hubbert presented his theory, he predicted that US peak oil would occur around 1970. The theory appeared accurate for a time, however, pessimistic prophesies on the future of oil have continued to prove false as world oil production has not only risen but hit a new all-time high in 2018.
Well, that was an exciting week in the markets! All three major US indexes started down on Monday following renewed global trade concerns and overnight protests in Hong Kong. The slide worsened mid-afternoon as treasury yields continued their tumble. However, Tuesday was a much different story after the U.S. delayed several Chinese tariffs through December. The announcement sent indexes ripping higher across the board.
If someone were to dive deep into the Evergreen Virtual Advisor (EVA) archives, they would stumble upon a publication from two years ago titled, “America is Great, Home Country Bias Ain’t.” The bulk of the article was written by GMO’s Rick Friedman and its main premise is that investors skew their equity exposure towards their home country. Americans who have invested in line with this idea over the past decade have unquestionably been beneficiaries as benchmark indexes including the S&P 500, Nasdaq and Dow Jones have all been on epic bull runs.