The Business Model Matters in Economics
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 11 June 2021
⏱️ 16 minutes
🧾️ Download transcript
Summary
We had a reasonably boring week in the markets (as of press time, which is after the market open on Friday, the Dow is modestly down on the week but no up or down day this week was particularly significant), but it was somewhat less boring in economic news.
What I want to do today is look at the variety of economic news circulating and apply a market perspective to it. My view is very simple as to the dangers around most conventional methods of receiving that news and most conventional methods of applying that news to investment practices: The news itself is prone to sensationalism, and the application of the news is prone to over-reactionism.
Put differently, the incentive structure behind how most people receive their news is flawed (and in this case, I am talking about economic news, but my statements here are true in all forms of news). And the incentive structure in how investment applications are delivered is substantially flawed, not to mention divorced from personal financial reality.
I unpack all of that this week, and do a look at the current news, and provide wise investment applications for you - within our framework - where the incentives are right, the temperature is moderate, the perspective is sober, and the culture is fiduciary.
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.7 | Well, hello and welcome to another edition of the Dividend Cafe podcast and video. |
| 0:19.2 | I am sitting in my New York apartment. I just flew back in last night and |
| 0:25.2 | we'll be here in New York for a little while. But this morning wrote a fresh divinity cafe. |
| 0:31.7 | I actually had something I really barely ever get, thank God, based on how much writing I do. |
| 0:38.9 | But I had a little writer's block this morning trying to figure out which direction I wanted |
| 0:43.1 | to go with Dividing Cafe. |
| 0:44.7 | And what I'm going to talk about here today is indeed where I ended up going. |
| 0:49.5 | And once I kind of got going, I enjoyed writing it. |
| 0:53.2 | I think it's a helpful message. And I'll let you all be the judge of that. |
| 0:58.9 | But the subject right now of economic data and economic news and how we are to feel about it and how we are to apply what we hear and feel to our investment |
| 1:17.5 | portfolios, what it means in terms of actual application, is I think a fascinating subject. |
| 1:25.8 | And I think it's one that is becoming increasingly important. |
| 1:29.9 | There's always been the presentation of economic data. And yet my general feeling coming out of |
| 1:36.5 | the COVID pandemic is that economic data right now is being presented in a more theoretically |
| 1:43.8 | actionable or potentially actionable way that I've ever seen it |
| 1:48.5 | in the last 25 years. It is being presented as if each data point must mean something to your |
| 1:58.8 | portfolio, to the world at large, that there is this great |
| 2:03.3 | kind of takeaway. And it's not just the silliness of like the consumer confidence number |
| 2:09.0 | month over month, which has always been candidly a joke. You know, or people trying to guess |
| 2:16.5 | what it may be if they're just real short-term traders |
| 2:20.0 | around interest rates or something like that. |
... |
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