Economic Independence Day - Part I
Fire the Talent Scouts
On July 26, 2025, Forbes published a review written by John Tamny of my book, The Moneyball Method. It was also published on July 18, 2025, at RealClearMarkets.com. This brief essay will focus on a quote from their twenty-sixth paragraph:
When the 21st century dawned GE was the world’s most valuable company, AOL and Yahoo were the darlings of the internet, Barrons told us Tyco was the next GE, Enron had the smartest executives (which may have been true despite the outcome), Lucent was the future of communications, etc. Readers get where this was going. So does Shupe.
Today, the Magnificent Seven of Amazon, Alphabet (Google), Apple, Meta (Facebook), Microsoft, NVIDIA and Tesla dominate headlines. That is because they dominate the S&P 500 in terms of both their mega size and their mega growth. And for objective investors, there are two things about this to know and love: 1) Capital finds talent, and 2) No one predicted this.
But what to do about it? By itself – nothing. As stated in my September 2nd podcast, “the economic experts and market forecasters will not be joining you today. Their time is up.” At the same time, the above average performance of global equity and fixed income markets this year may have had a substantial impact on your account values. And compared to historical measures, equities are overvalued.
To the objective investor, only the first of these two observations are relevant to their investment strategy decision. That is because it is impossible to predict an extraordinarily complex and elegant network of markets and only a charlatan would want the power to control them.
So, what to do about the market valuation effect on your account values? If everything else held constant, high growth rates increased the funding status of your cash flow strategy. And in some cases, that will present a new challenge – an overfunded plan! If so, the pragmatic, traditional investor will stay the course and perhaps rebalance to the original investment strategy. After all, if it ain’t broke, don’t fix it, right? Wrong.
The principled, objective investor will reduce risk exposure, adjust saving and spending goals, the timing of events, or a combination of them that will change their status to fully funded.
Notice that both investment and cash flow strategies are variables you control. And to work in harmony, we must define both and integrate them in a way that meets your needs, is easy to understand, and is reliable. That is also how successful businesses operate. To learn more, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/