I’m lucky to live about a four-minute walk from a truly sweet trout stream.
Out my back door, down my driveway, a few quick turns, and I’m knee-deep in cold water. Looking to land my fly ever so lightly upon the edge between currents.
There be trout in those edges. Their bodies expertly crafted by 15 million years of evolution to let them slip between faster and slower water with minimal effort. After all, while the food sources alight randomly upon the river’s surface, the delicately balanced differential between currents concentrates that food into an opportunity hot spot.
But even the slightest vagaries of nature upset that balance. More flow here, less flow there (symptoms from a source unknown) and chaos erupts. Vortices emerge unannounced — unpredictably — and vanish. Nature resolves its differences. And it uses chaos to do it.
Now, chaos can be many things.
It can be confusing. It can be exhausting. And it can be exhilarating.
But, mostly, it’s a process. A process that releases the tension between opposing forces by providing a path to new equilibriums.
And chaos is another thing too — opportunity…
The Underlying Source of It All
Global financial markets find themselves caught in a resolution process of their own.
Pro-growth policies are meeting inflation and, at least after the Fed’s announcement today, they clearly favor helping growth maintain its speed.
Which isn’t all that surprising. Who knows how many times I’ve said their hands are tied?
But that means faster inflation. And faster inflation relative to growth provides yet another opportunity for chaos to go to work on stock, bond, and commodity markets around the world.
All of which are but symptoms of even more chaos at the source of it all — people.
War in Ukraine — people.
China locking down its country to “eradicate” COVID (good luck) — people.
Japan easing rates because they want more inflation — people.
The Fed avoiding political risk by shifting inflationary risk to the populace — people.
Growing fears of even more inflation, food shortages, and Supreme Court rulings — people.
The global zeitgeist is division. Division creates differences between people that must be resolved. And vortices will continue to emerge seemingly everywhere throughout markets until new equilibriums settle in at the source.
There is a lot coming down the Pike. And, as investors, you have no choice but to meet it. And to help you navigate the ever-evolving market chaos, check out our public Prosperity Pub Community over in Telegram.
It’s free. It’s open. And I drop in there all the time to share what I’m seeing in the markets, including opportunities as they shape up.