Saber Rattling

According to Wikipedia, the term saber-rattling, was based on an incident in Chilean history that took place on September 3, 1924, when a group of young military officers protested against the political class and the postponement of social measures by rattling their sabers within their scabbards.

The term is now applied generally to cover an indication of any military aggressiveness.  For example, North Korea’s recent firing of 5 short-range ballistic missiles into the Sea of Japan appears to have been an effort to step up tensions in the region.

Another example would be strategically timed war games that can serve as an explicit form of saber-rattling, in that a country’s military muscle is put on display for other countries to see.

To the extent that such saber-rattling puts markets on edge, investors should be careful to assess the nature of the activity and potential threat before making definitive portfolio decisions.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®