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Power Plays In The Global Economy 🌐
Did you know that after World War II, European nations increased their defense spending in an attempt to counter potential future threats?
Equity Eats
March 07, 2024
Power Plays In The Global Economy 🌐
Did you know that after World War II, European nations increased their defense spending in an attempt to counter potential future threats?
Given the current global climate, it may be necessary for Europe to rediscover their need for preparation.
In this newsletter, we spotlight three key financial insights:
Europe Must Invest In Its Military: First, we’ll highlight Europe's need for greater defense autonomy in an unpredictable geopolitical landscape ⚔️
Is The Rally All About Tech: Next, we’ll bust the myth that the stock market's success rests solely with tech, showcasing the contributions of healthcare, industrials, and more 🖥️
Should We Care That Insiders Are Selling: Finally, we’ll Investigate the impact of insider sales on market perception and the strategic reasoning behind diversifying assets 🤔
Our aim is to equip you with knowledge to make informed investment decisions, understanding the broader forces at play in the global economy.
Europe Must Invest In Its Military ⚔️
Europeans fear Trump's return to the White House, and who can blame them after he said he’d “encourage” the Russians to “do whatever the hell they want” to allies who don’t pay enough for their defense?
Yet that comment should wake up those in Europe who think that U.S. resources and will are infinite.
Trump reflects a growing American frustration with many allies that refuse to face the harsh international reality: that rivals are arming rapidly, and the only guarantee of security remains a large, and perhaps unsustainable, U.S. military expenditure 💰
The benign international conditions of the 1990s and early 2000s didn’t last.
Now it’s clear that progress toward global harmony isn’t happening, and nourishing such illusions is dangerous.
Those in Europe who fret that the Continent is in danger but then ask the U.S. to protect it at high cost are covering up their unwillingness to make hard choices.
European nations should arm themselves regardless of what a U.S. president, or a presidential candidate, says 🛡️
Is The Rally All About Tech? 🖥️
It’s tempting to think that the scorching rally that continues to send stocks to all-time highs is based entirely on hype about AI.
Don’t believe it.
The recent surge may have been sparked by Nvidia, but it has spread well beyond the AI behemoth.
Three sectors hit new highs this past week—tech, healthcare, and industrials 🖥️🩺🦺
Financials and materials are less than 5% away from their peaks.
The big concern has been that it’s only seven stocks that are making new highs, but none of the evidence confirms that concern.
The rally is broadening 💪
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Should We Care That Insiders Are Selling? 🤔
Conventional wisdom often argues that when CEOs are selling stocks in their own companies, it’s a sign of a market top or at least of a top in their share prices of their own companies.
Recent reports that Mark Zuckerberg and other CEOs are unloading their own shares have fueled some speculation that the market must be in bubble territory.
This is likely not the case ❌
Like any smart businessman, CEOs probably know that it's not wise to have most of your wealth tied up in a single asset, and some diversification makes sense.
After the big run up in stocks, CEOs are likely diversifying their wealth, which is a wise move.
Most good CEOs are not spending their time trying to time markets and engaging in deep analysis of whether we might have a market pullback 📉
Following the latest trade made by Mark Zuckerberg is not a good recipe for your own portfolio decisions.
