July 18, 2025
I’ve mentioned before that one of my abiding efforts over the decades in which I managed money for people was to ruthlessly eliminate bias from my decision-making. Bias creates an inaccurate view of the world which in turn sets a fact set used to make decisions. As they used to say, garbage in garbage out.
And this pruning of bias input includes political bias. In sum, I did not allow my personal political bias to influence how I was going to deploy capital in the markets. Hard enough to guess the future (it’s always a guess, even though we dress it up as a ‘forecast’), even harder if you’ve got the facts wrong.
And bless their hearts, the media plays right into this because the more emotions are amped about politics (or anything), the more they put it out in front of people to amp them up, which in turn increases the negative effects of bias. Eyeball magnets.
Try it this way. Let’s say you can’t stand Mr. Trump. You have a real gut dislike of him, both as an individual but also, as President. As a result, you find it impossible to give him credit for a win, even if a win is a win. Well, that’s bias.
Assume he announces an economic effort or strategy. And further assume it’s a good idea. And more further (if that’s a phrase), it’s one that should be ‘bought.’ You should place capital on the side of its success. Will you? Of course not. And of course the opposite is true if you couldn’t stand Mr. Biden. Bias isn’t biased…it comes after everyone.
So, how does this all play out?
The Gallup Organization runs a lot of polls and one they run periodically is to ask people if they believe stocks will go up over the ensuing six months. More, they parse responders by political affiliation. Here are the latest results, posted this Spring:
You can’t convince me this result is anything other than a vote on Mr. Trump. Hate him, hate his policies. Love him, the opposite. So here, in the Spring, almost no Democrats expected the market to rise, while a majority of Republicans expected it to rise. BTW, this gap is the largest reported in the last 25 years.
Now you tell me. Take a guess…who made money when the market ramped from an S&P 500 low of 4,800 in late April to the current 6,200. I mean, we have to assume the bulls had money in and the bears, money out, or at least, lightened up. Clearly, political bias harmed one side and helped the other.
OK, so this is not a Left=Dumb Right=Smart thing. Because look closely at the time period when Kamala Harris was charging and it appeared she had a credible shot at election. In October, the percentage of Republicans who thought the market was going up in the ensuing six months had fallen to only 20%, while the percentage of Dems believing stocks were going up hovered around 50-60%.
From October to April, the S&P 500 rose from 5,600 to 6,100. So, take the same guess and you’ll guess the Dems made money and the Reps did not.
Look at 2020 when Biden was elected. Democratic bullishness ramped from a low of 20% to 60% while Republican bullishness plunged from 80% to 20%. In the ensuing six months, the stock market rose 25%…Dems 1 Reps 0.
Now the hard thing in all of this is that both sides were right and both sides were wrong, just tending to be the polar opposite of each other. So whichever side you take, you’ll get some atta boy atta girl from the stock market which will validate your feelings. Thus, you erroneously start to believe your political acumen is a great thing.
Sorry, it’s not.
Let’s go back to April. Here, we have the media doing the smarmy nah nah y nah nah about how the ‘smart money’ was so smart:
Investors got hosed when Trump’s tariffs tanked markets. Some of America’s billionaires managed to sell before the plunge
By Clare Duffy, CNN
3 minute read
Updated 1:07 PM EDT, Thu April 24, 2025
(Claire please don’t take offense but you’re not bookmarked on my web browser so I can get the latest and hottest market commentary.)
So here in part is what she reported:
“New York CNN —
Many of America’s wealthiest business leaders have lost millions, if not billions, of dollars in net worth since the start of the year, as President Donald Trump’s policies hit markets. But some might have lost even more if they hadn’t offloaded millions of dollars’ worth of stock prior to Trump’s tariff announcement in early April — not necessarily because they knew something the rest of us didn’t, but because the wealthiest investors treat their portfolios somewhat differently than the average investor.
Meta CEO Mark Zuckerberg, Oracle CEO Safra Catz and JPMorgan CEO Jamie Dimon were among the top 10 stock sellers by value during the first three months of this year, according to data from The Washington Service, which tracks buying and selling by corporate insiders.”
See, one of the themes the media just loves is:
“You’re a dope and the smart money isn’t dopey and here’s why they have more than you, you dope.”
Well, OK, let’s see how smart the smart money really was:
Mr. Zuckerberg sold META. At March 31, META was at $500, now, $700.
Mr. Dimon sold JPM. At March 31, JPM was $200, now, $300.
Mr. Catz sold ORCL. At March 31, ORCL was $130, now $230.
Given the taxes and all of that, plus the ramp in stock prices since then just how smart was the ‘smart money?”
Of course, this kind of follow-up is never, well, followed up by the media. For one thing, it’s kind of embarrassing. Second, it is contrary to the theme of the average investor being a dope while others are not dopey. I guess CNN was trying to show people how not to be dumb, but you know, the Law of Uninteded Consequences was at work.
Now that you have context, perhaps it is better understood why I relentlessly drive political bias out of my investment work. Because I don’t conflate the sponsor or the author of an economic effort for the effort itself.
In simple terms, I analyzed tariffs, not through the lens of Trumpian love/hate lens but simply as to whether or not tariffs would be a good thing for markets, which is where I live. And since my only control over events is how I position my money, I simply try to take a clear look, decide what I believe the result will be, and then act accordingly. Sometimes that means I become bullish, even if I don’t like the author, and sometimes bearish even if I like the proponent. And a great deal of the time, I never forget this:
All this business about forecasting is much exaggerated. All of it, as I’ve said, is a guess. Sometimes it is an educated guess, sometimes it’s a guess heavily laden with emotion and bias, but it’s all a guess.
But you and I are fed a constant stream of guesses which are called forecasts in which we are encouraged to buy or sell or whatever. Honestly at the time of tariff eruption, I had a couple of thoughts:
Whoo boy, this is going to be interesting.
Wowie, I really don’t know what’s going to happen.
Zowie I think we’ll muddle through it because that’s been the history of tariffs.
As a result, given the obvious fact that no one knew how it would turn out, I just stayed focused on the small stuff…the earnings of the companies I like, the mathematics of the options, controlling my overall risk. I didn’t attempt to handicap tariffs, decide on the effects and then act with my money.
Because I didn’t know how the terms would settle out and so, had no clue.
Gentle readers, in case you wonder, that kind of conclusion does not get you onto your favorite cable news channel, financial or otherwise. No eyeball count magnetic attractions in that.
Don’t invest your politics, I say.
https://www.cnn.com/2025/04/23/tech/billionaires-stock-sales-tariff
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