Iron Capital’s quarterly review of capital markets performance and updated market forecast.
Ultimately all these ideas persist because of the fatal flaw of economics as a science. In the hard sciences the scientific method requires a control – this group gets the experimental treatment while this other group gets a placebo. The treatment works or it does not. There is no control group in economics. So what are investors to do?
The market can in fact be wrong, and I believe it is wrong right now. However, John Maynard Keynes was also correct when he famously said, “The market can stay irrational much longer than you can stay solvent.”
The gap between growth stocks and value stocks is becoming alarming. This has not happened since the market boom leading up to the Dot-Com bust.
Negotiating is almost always ugly, and we have learned to not like haggling. Well, this administration haggles and so do the Chinese. The markets, let’s face it, are dominated by young professionals (or the computers those youngsters program) who never had to bargain for anything.
“We are bigger than US Steel,” said Hyman Roth to Michael Corleone in the classic film The Godfather Part II. That scene was placed in a Cuban hotel shortly before the conclusion to the Cuban Revolution in 1959. The irony being that both the mob and US Steel had begun to decline in importance by the time the movie came out in 1974. Those trends have continued to this day.
