Are you tired of hearing about the #Brexit vote? You should be.
(I don’t recommend kissing strangers, regardless of the presence of exquisite face paint.)
To be clear, I’m not saying the Brexit is not important, it certainly is, but the media hype-fest has not been very helpful to anyone.
Here’s what you need to know about the Brexit drama: There are a lot of desperate people in the world.
What do I mean? There has been very little economic recovery since the financial crisis and people are tired of struggling and being afraid. When people struggle as long as so many have, they start getting desperate. Desperate people typically make pretty poor decisions.
Want an example?
“Even though I voted to leave, this morning I woke up and I just — the reality did actually hit me,” one woman told the news channel ITV News. “If I’d had the opportunity to vote again, it would be to stay.” (From the Washington Post)
I’m confident this person is not alone, showing the danger the ignorant voter is to democracy everywhere.
America’s Brexit
The Brexit drama reminds me of another unfortunate drama, the U.S. Presidential race. For the record, I don’t like either candidate and am struggling with what that means come November.
Donald Trump is where he is in the race because there are a lot of people struggling and a lot of people living in fear in the U.S. Those people are desperate and Trump has done a masterful job of tapping into that desperation.
(Donald Trump thinking about the prank he’s pulling on America. P.S. I don’t like Hillary either.)
What’s Your Point Brian?
What’s my point in all this?
The situation in Britain and in the U.S. can be found throughout the world and are all trending in a negative direction. Desperate people move toward self-preservation and self-preservation is anti-globalization.
My expectation is that as long as the global economy continues to languish, desperation levels will increase and ultimately lead to some form of large scale, perhaps global, conflict. I don’t like to think about that, but history and human psychology seem to point that way.
The Next Stock Market Crash
Now, back to the title of the article.
Another thing I’ve learned from the Brexit drama is that the media hype and accompanying fear was mind-mindbogglingly overblown. The next stock market crash is not going to be obvious or come from an event that is worshiped by the media. I’m sorry, that’s just not how things work. The next major, negative (and positive) stock market event will catch most people by surprise.
Stop listening to the headlines and start spending more time on the back pages, you might just find something of value that the world is too busy to pay attention to.
Global Economic Recovery: Where Are Thou?
One more thing, there continues to be an ongoing debate between bulls and bears about whether the U.S. and global economy is recovering well. People get into lots of debates and dive into guesstimated stats and charts to make their points.
Attempting to quantify something as immense and diverse as the U.S. and global economy is impossible to do with any great accuracy, hence all the debate.
Here’s what you need to know (IMO): If there was any real recovery of note, you wouldn’t need someone to try to convince you. If an economy is growing and thriving, it doesn’t take a rocket scientist to realize it.
Globally, seven years after the crises, there is no meaningful sign of ongoing economic recovery.
What does this mean as an investor? Fundamentals say raise cash and be cautious, but the markets don’t seem to care.
I spend a lot of time and money every week to have access to some of the best investing and economic minds out there and my goal is to digest all of it and pass it on to you. Please let me know if you have any questions or if I can help in any way.
Best,
Brian
I’d like to see more content like this!
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Nassim Taleb Investment Philosophy: How I Just Made Gains of 224.35% in 9 Days
David Stein Father’s Day Interview – Deciding Between Family and $35 Billion
Worth Reading This Week:
Larry Summers: The Fed is making the same mistakes over and over again – The Washington Post
Eleven Signs You Own the Right Portfolio – Jonathan Clements
The Economy ≠ The Stock Market
Finding A Few Misplaced Bets – Medium
51 things not to do if you want to be better off financially – MarketWatch
Disclosure: This article is for information purposes only. Comments made by my guests do not necessarily represent the views of Brian or Investor in the Family. There are risks involved with investing including loss of principal. Brian and Investor in the Family makes no explicit or implicit guarantee with respect to performance or the outcome of any investment or projections made. There is no guarantee that the goals of the strategies discussed by Brian and Investor in the Family will be met.