“The world is a fragmented and complex place, and a single factor is never a solid foundation for forecasting.” – Ruchir Sharma, Financial Times
Welcome to February. The 17th is Presidents’ Day, and as it happens, we have a new/old one to start the month. One-half of the electorate is joyful; the other half … hopeful at best. Investors in stocks—with markets near all-time highs—have been both joyful and hopeful. But success in The Money Game is like poker; a winning hand requires having more than one good card. The ranking, top to bottom:
Ace—The Economy. The American economy is a $29 trillion juggernaut with millions of participants. This complex and dynamic system feeds corporate earnings and animal spirits, the main drivers of stock prices. As we’ve recently seen, and despite their best efforts, this unmanageable beast has the power to smack down presidents when things don’t go its way.
King—The Bond Market. Think Bond … James Bond. While speculators in stocks love exciting stories, players here are rational, numerate, and calculating. As part of this $51 trillion behemoth, the 10-year Treasury note is the lynchpin affecting interest and exchange rates around the world. For anyone buying anything on credit, rolling over debt, or utilizing a discount rate, the cost of money matters. Presently, this gimlet-eyed king is focused on America’s debt and deficits … and is concerned.
Queen—The Federal Reserve. The Fed’s policies affect financial liquidity and interest rates, which in turn affect stock and bond prices. When the party (the economy) gets out of hand (too much inflation) the Fed takes the punch bowl (liquidity) away. Few people know that, in 1981, the Fed funds rate was dialed up to 19% to battle inflation. When the party ended, the hangovers were painful.
Jack—The President*. The Founders wisely ditched the man-as-king idea back in 1776, replacing one fallible human with a finely balanced system of governance—filled with hundreds of fallible humans. And it’s worked out well. Nevertheless, the president is arguably the most powerful person in the world, especially with a trifecta in Congress. But in the end, results trump promises, and one man is no match for the market gods.
Number Cards—The remaining cards (taxation, regulation, trade, and immigration policies being the high numbers) can either help or hurt, depending on how they line up.
*As Americans, we naturally hope that a president’s policies will be good for the country. For investors, time will tell if the Trump card is a jack or a joker.
“The man who does not read has no advantage over the man who cannot read.” - Mark Twain
Three cheers for the Supreme Court and their 9-0 ruling against TikTok, the digital fentanyl created by the Chinese to make American kids stupid. I’m on a patriotic (and Quixotic) quest to Make America Smart Again, and effective messaging is key. But making a point with ALL CAPS!!! or a BIG BLACK SHARPIE is not my style. However, in watching way too many playoff games, I’ve noticed that advertisers use repetition as a strategy—Burger King must run at least ten ads per game. So, once again … I urge readers to check out my online passion, The Dispatch. While many Americans are addicted to fast food, social media, and partisan news silos, the offerings at The Dispatch are a delicious and nutritious alternative. As their own Chris Stirewalt eloquently explains:
A news outlet cannot be your family, nor is it a replacement for a personality. It is not your tribe or your political identity. It is, one hopes, a place to get reliable information, bracing opinions, and context that a news consumer can take back into her or his life to be a better citizen, neighbor, co-worker, family member, and person. The news is a tool, not an end unto itself.
For many in the news business, the aim since the internet turned the world upside down 20 years ago has been to cultivate ideologically siloed superusers—addicts who provide a narrow but reliable audience. What I have found at The Dispatch has been the opposite. I have encountered a remarkable diversity of views and attitudes from my readers here: nationalists, conservatives, liberals, and progressives. And that is all the more remarkable because this is a subscription site, so very few of you got here by accident.
While The Dispatch is a subscription site, by foregoing the fast-food fix just once a month it’s budget-neutral. Their menu is here.
Finally, if you happen to enjoy mystery novels, I recommend No Good Deed by Lawrence Fischman. Full disclosure … while Larry is a respected Dallas attorney, he’s also a good friend. His latest book features a diverse cast of characters with our city as the main setting. Check it out here.
Valentine’s Day is of course on the 14th. Share some love with a friendly smile and a kind word for your fellow citizens. It will make you feel pretty good.
Copyright © 2025 - Any opinions are those of James Aldendifer and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Investing involves risk and you may incur a profit or loss regardless of the strategy selected. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.
