I was reading, post-election, an issue of the New York Review of Books that came out just before the voting began in earnest. I was struck by an essay by an Irish professor. Writing about NYT interviews of potential voters, it reads in part:

“These good people sound small and lost and poorer than they used to be. None of them mentions the fact that Trump is deranged, and this, in its turn, seems crazy to me. I am hypnotized by their denial, blinded by their inability to see. What is the secret, maddening wound that sets their minds spinning away from the obvious problem here?” 

The author has similarly unflattering things to say about Democrats.

This reinforces something I’ve been thinking a lot about recently, which might be summarized in Jean Baudrillard’s observation that the fantastical media interpretation of experience, the hyperreal — ultimately becomes to be seen as more real than reality itself.

There’s a stock market analog to this, in two ways. We’re in very confusing times economically, one’s where the loony ideas of media personalities (think stock market TV/radio, as well as the internet) are taken as the truth …and move stocks.

How to deal with this?

The most straightforward stance for equity investors is to have holdings that mimic the index, typically the S&P 500, or the NASDAQ for more adventurous souls. And the reality is that professional managers in the aggregate chronically underperform these benchmarks, even before collecting their management fees. So it’s hard for me to imagine that collective result being better in confusing times.

The way we as individuals have the best chance at outperforming is to have one or two individual holdings that we know extremely well, and the rest of our money in index funds. The standard for the active holdings should be high–we should have a reasonable belief that we know relevant stuff that most others don’t. Yes, we’re aided by performative media actors who pretend to be securities analysts as they opine, who are mostly clueless, and who muddy the waters. Still, outperforming is difficult.

In times like these, we should either be super-sure or have a heavier weighting than normal in index funds.

I haven’t done a lot yet to change my own portfolio. I have noticed that sort-of-broken value stocks and defensives seem to hold a lot more appeal for me today than, say, a year ago. I’m reading the recent strength in bitcoin as at least in part preparation for capital flight. And I think that the imposition of tariffs and/or deportation of workers would be a signal to become ultra-conservative. Hard to believe that all this is happening in the US.