It froze the start of my post this morning, so I decided to publish and then add on.

My observation is that the apparently non-stop lack of any rational economic planning in Washington, which has made major US stock market indices the worst place to be since the inauguration, no longer has the negative shock value for either the US dollar or the S&P 500 that it had, say, this time last year.

As damaging as Trump has been for the US economy, his Iran misadventure seems to be having much more severe negative effects on the rest of the world, Europe in particular, since it is much more dependent on oil coming through the Straits of Hormuz than the US is.

My sense is that the strategy that worked so well last year–finding companies with costs in the weakening US dollar and revenues from abroad, is pretty much played out. It seems to me that, in the eternal war between concept and valuation, we’re now in a period where relative valuation will count for more than the “Big Picture.” I’d been thinking that, given the sharp decline in the $US over the past five quarters, American brand names might have a price-based appeal to foreign acquirers. While this may eventually happen, the contractionary economic policies of Washington coupled with the reputational black eye from ICE et. al., argue that this is the wrong place to be, I now think, for all but the most deep value investors.

In short, I think we’re in a pure stock picking market.

Europe is constrained to some degree by the oil shock as well as the relatively limited selection of publicly traded companies. This leaves Asia, I think, with Hong Kong as an entrance point to China, and Japan, as possible areas of interest.

As to the Magnificent Seven (not my favorite name, but a great movie), I’m not sure there was ever a coherent economic story behind it. Nvidia (which I don’t hold now) is the only one I’d consider buying. I do own a small amount of MSFT, which I’d sold in early 2000 and bought back when the Ballmer era ended. I’ve been putting it in a charitable trust rather than selling, because my cost basis is so low.