The Truth Is Paywalled But The Lies Are Free
But let us also notice something: the New York Times, the New Yorker, the Washington Post, the New Republic, New York, Harper’s, the New York Review of Books, the Financial Times, and the London Times all have paywalls. Breitbart, Fox News, the Daily Wire, the Federalist, the Washington Examiner, InfoWars: free!
Just before the crash of ’29, I heard a young man declaring that the bull market still had a long upswing ahead because increased use of machinery enabled manufacturers to produce goods so cheaply that they could find markets among groups of people who formerly could not afford to buy. Later, after three years of declining stock prices, this same young man expressed his strong belief that the bear market still had a long way to go — all on account of the mechanical age in which we find ourselves… He pointed out that, because of machine production, a great mass of people, no longer needed in industry, have lost their buying power, with consequent reduction of business activity. He used the same facts to prove diametrically opposite opinions.
Online broker firms have seen record interest in new accounts & trading activity YTD as the move to zero-commission trading, the market volatility, government shut downs, and lack of sports / other gambling ventures have led to the perfect storm for retail trading. This has resulted in an explosion of brokerage accounts for legacy players & FinTech challengers alike.
Investors Drifting towards Name They Know
This explosion in new accounts, coupled with existing trends towards passive management / quant funds, has started to change market microstructure, flow of funds, and likely led to distortions of valuations vs. historical precedents. The combination of the above factors has led to a significant inflow of capital into names that “people know” which include global brands / companies such as Apple, Amazon, Disney, Facebook, Google, Microsoft, Netflix, Nike, and yes even Tesla.
In our recent piece Emerging Market FinTech, we highlighted Brokerage Functionality as a key area of interest for us. We pointed to companies such as Flink in Mexico, Toro in Brazil, Bamboo in Nigeria, and more recently GoTrade (formerly TradeID) in SE Asia, while noting global players such as eToro. As international market participants open up access to US equities they immediately gravitate to these same names that they “know” such as Facebook, Amazon, Apple, Netflix, Google, Microsoft, and still yes, Tesla.
“For Cortright, one of the keys to the retail trading bonanza is the proliferation of more than 2.5 billion smartphones around the globe. That, combined with the rise of electronic markets and growing wealth in emerging economies, means an even bigger wave of retail trading could be building up. As digital wallets like INDmoney in India or Australian brokerage app Stake become popular, Cortright thinks “globalized investing” is taking root.
The US stock market will benefit from this overseas investment money. American brands are well known around the world, and the US equity market is the deepest and most liquid in the world. Cortright said his company is adding around 100,000 new brokerage accounts each week, and about 45% of those are outside the US.
Intelligence And Logic
To solve logic-proof problems requires intelligent, logical people to admit the possibility they might be wrong about something, but these people’s minds are often most resistant to change – perhaps because their status is deeply entwined with their capacity for reason. Highly educated people don’t merely use logic; it is part of their identity. When I told one economist that you can often increase the sales of a product by increasing its price, the reaction was one not of curiosity, but of anger.
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When you’re trying to get wealthy, you think it’s this ridiculously important thing. And then when you make some level of money and you’re “financially independent,” you realize that it does make your life easier. In some ways you have a little bit more access to things and certainly more luxury, but it doesn’t make your life easier as it relates to the great equalizer, which I would call the human condition. So, what is that?
Bill Gates’ mom died. He was a young man. He said that he had all the money in the world, but he couldn’t figure out a way to save her. And so, there’s a great equalizer. We’re born. We die.