Summary:
When something is going awry, people, including investors, become fearful and get carried away. There is no meaningful supply of oil in Gaza, Israel, Lebanon, or Syria, but that has not prevented oil markets from rallying. Investors think they need less risk, pushing stocks down, and U.S. bonds and the dollar up. But the hostilities now taking place are unlikely to expand to engulf Saudi Arabia and other sizeable oil producers, particularly since the Saudis have already publicly blamed Hezbollah as the instigator. Those who can separate political events overseas from economic and profit growth domestically should find very attractive investment opportunities now in equities.
When something is going awry, people, including investors, become fearful and get carried away. There is no meaningful supply of oil in Gaza, Israel, Lebanon, or Syria, but that has not prevented oil markets from rallying. Investors think they need less risk, pushing stocks down, and U.S. bonds and the dollar up. But the hostilities now taking place are unlikely to expand to engulf Saudi Arabia and other sizeable oil producers, particularly since the Saudis have already publicly blamed Hezbollah as the instigator. Those who can separate political events overseas from economic and profit growth domestically should find very attractive investment opportunities now in equities.
The Chicken Little fable, best remembered for the first quote in the title above, is happening in the markets today. Oil, government bonds, and the dollar have risen as investors seek out.....
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