by Doug Behnfield
“It’s the market that makes the news, not the news that makes the market” – Bob Farrell, circa 1987
Brexit may not be the reason for all the market action we have experienced in the last few weeks. After all, 72% of eligible voters in Great Britain went to the polls and 49% voted “Leave” while 47% voted “Remain”. How British. At the Coliseum, it would have been “Thumbs up” or “Thumbs down”. It was basically a split decision. Older, middle-class citizens showed up and voted “Leave” while the Elite and the younger voters, (along with the Scots and Northern Irish) showed up less and voted “Remain”. There is nothing new here but there is certainly news. And for those of us struggling to make appropriate investment decisions, an understanding of how the financial press works is an essential part of good investment strategy, offering a great window into investor sentiment.
In the words of George Friedman, respected founder of Stratfor and a leading geopolitical analyst: