All’s Well That Ends Well – Maybe

The week began with a frenzy over the apparent rift in NATO over America’s demand that it own Greenland. Tariff threats were made, and retaliation plans were made. The stock market sold off hard. Some investors wanted to reduce risk assets in the event of another trade war. Then, in Davos at the World Economic Forum, it was announced that perhaps accommodation had been reached, or at least an outline toward one.

Did the Bull mention in last week’s blog that our economy and stock market were showing signs of instability – yes, he did. Perhaps investors were sensing the events that followed were increasingly likely. Perhaps they are over, but the Bull has warned many times that we would have to endure bouts of volatility this year. It’s just that it’s impossible to know what the catalyst might be.

All this macro-concern took investors’ focus off our own economy and companies’ performance. Fourth-quarter earnings reports are just now being released. These will inevitably be more important to investors than the international news events of the moment. Never forget that the most important factor driving the value of any company is the earnings and returns it can make for its shareholders. So, with this latest crisis perhaps averted, we can all get back to fundamentals. Stay steady my friends.

-The Lonely Bull