A Critical Juncture
Much is being written about the dilemma that President Obama faces on what to do about Syria. This issue has far more to do with politics, both domestically and globally, than it does with investing. From an investment perspective, the more perceived risk (wars, strife, economic imbalances, etc.), the higher the discount rate and vice-versa. The higher the discount rate, the lower the value of assets.
What is most pressing at present is the perception that investors have, and will carry forward, the competency of President Obama (more competence, less risk). With no clear right or wrong judgment, arguably, the Syria decision may prove in hindsight to be the most difficult and monumental of his presidency. As a result, much pivots from here. While many may not support all or any of his Presidential actions, the reality is that this country and the world cannot afford a perception of a failed presidency. He therefore needs the support of all Americans at this critical moment.
All comments and questions are welcomed.
Bob Bilkie, CFA