Jan 29, 2020
January 2020 has been an eventful month. Geopolitical events and other exogenous factors have roiled global financial markets. In the end, they may not matter all that much where the trajectory of the global economy is concerned. In fact, they may not matter at all.
Nicholas Reece of Merk Research shares his thesis that there is a "subtle fallacy" that events in the news are important to the global economy and financial markets. This is due to evolutionary biography, behavioral biases, and the nature of the news business in the digital age.
In a wide-ranging conversation, Reece tells listeners how to cut through the noise to identify data that has real economic repercussions. One conclusion is that in 2020 (at least so far) to be a contrarian means being optimistic.
Content:
- The "subtle fallacy" of news (1:32)
- Humankind's innate negativity bias (2:43)
- So what news is relevant to the economy and to markets? (4:09)
- Discerning the signal from the noise for investors (5:50)
- Economic damage from the coronavirus (7:53)
- "Unknown unknowns" (9:32)
- Nick Reece's "origin story" as an investor (12:41)
- The changing public perception of the Federal Reserve (20:30)
- Being positive is contrarian (26:21)
- A short discourse on political commentary (27:25)
- Favorite economic indicators that can supply contrarian signals (30:19)
For more information about Nick Reece and Merk Research, visit their website.