Capital Ideas Newsletters


Fear & Greed

January-February 2022

The investment world rises and falls on the emotions of greed and fear. In January, the prospect of higher interest rates, tension between “The West” and Russia over Ukraine, and inflation brought fear into the hearts of investors. Fortunately, money is made thinking and not feeling.

Our thoughts are focused on how to take advantage of these opportunities when others are not thinking clearly.

This year is a mid-term election year and it is primary for the Democrats not to cause big dislocations before the elections.

As political pressure mounts on the Federal Reserve Chairman Powell, interest rate increases might be slower than anticipated.

Goldman Sachs expects S&P 500 earnings per share to rise 12%. If Inflation slows and rates do not run away on the upside, this profit performance could lead to a good year for stocks.

We want to reiterate that your personal asset allocation is key to long term performance goals. As we said last month, discipline is paramount to the successful investor.

The Russia-Ukraine crisis has spotlighted the importance of high oil prices to Russia. Mr. Putin is emboldened by the large revenue source from oil and gas holdings.

It’s important to remember that the jitters of the market by some measure are caused by the international turmoil at hand. These crises tend to be transitory in nature, but certainly make markets anxious.

At a time like this, some words of wisdom from great investors are always helpful.

“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price”

– Benjamin Graham

 “Never test the depth of river with both feet”

– Warren Buffett

“Individuals who cannot master their emotions are ill-suited to profit from the investment process”

– Benjamin Graham

The above comments are brief tutorials about investing. Nevertheless, are very poignant.

During the pandemic, the U.S. government provided tremendous support to its citizens. Eventually, we all knew that this intervention would end, and the withdrawal of the economic stimulus would have consequences. We must plot a course that can weather the potential outcomes.

This is the challenge we face in 2022. America has faced many great challenges and has emerged strong each time. We believe that this time will be no different.


Stay warm and stay tuned.

As always,

Seymour W. Zises

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