Good morning. One of the investment phrases I shared with my class last month was that in a very sharp and unexpected downturn, the saying of “I got my face ripped off” … is often uttered by someone whose account was hit hard that day. Well, a lot of people made this statement on Friday as Trump’s retaliatory Chinese tariff announcement resulted in many investors rushing for the exits and trade war fears (which seems to have calmed a bit) began anew. As has been the case of late, markets regained some of its loss this morning as a weekend positing by the President of “it will all be fine” gave hope that things might eventually be worked out between the two countries … but what has a lot of people upset (this means me) is just how a simple utterance can result in such a sharp portfolio decline. Sometimes I wish things would just be done “behind the scenes” and these public statements would not be so quick in being displayed. There is too much as stake … transparency be damned. Morgan Stanley took a look at the present tariff situation and gave the view tensions need to be reduced by the November 1st deadline, or else a possible 11% decline is certainly on the table. What has been lost in all this shuffle? Realization that the next Fed meeting is just 2 weeks away … while, according to FactSet, two rate cuts by the end of this year is still very much in the cards. And what might help the market (with the Dow down almost 1,000 points from the all-time high reached earlier this month)? “AI” … which, rightfully, continues to have everyone’s attention. But when it comes to AI people still need to do quite a bit of “vetting” to make sure the information is accurate … which is addressed in the last article below. It seems one study claims that nearly 25% of the time suggestions were made to go to places that are permanently shuttered. I know I am all over the place today as I just finished grading mid-term exams and need to do some inner reflection to see which areas I might not have properly explained. It is, of course, one of the challenges …. as things you think of as so obvious and quickly gloss over are not so “plain to see and comprehend” by someone introduced to it for the very first time. On top of that, I think I have a mild case of the flu. I thought I could handle it on my own, but this beer-flavored medicine I created doesn’t seem to be working. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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