Transcript
A (0:00)
FOREIGN we're taking a deeper look at the impacts of a prolonged government shutdown and discussing what investors need to know now. Today on Motley Fool Money. It's Tuesday, October 28th. Welcome to Motley Fool Money. I'm your host, Emily Flippen. And today I'm joined by fool analysts Jason hall and Keith Bytes. And to dig into the government shutdown and some of the second order impacts that could leave investors spinning. As of today, we are on day 27 of the government shutdown. This is the longest running government shutdown since 2018, when the government was shut down for 35 days. There is, as of right now, still no end in sight. Now, I know we've discussed some of the first order impacts of a government shutdown in the past, especially for what it can mean for consumer spending confidence and in the holiday season. But I want to dig into some of the deeper impacts that investors may be less familiar with. Jason for me, what comes to mind most immediately is the lack of economic data. We are supposed to be getting yet another series of economic reports, things like personal income, GDP and durable goods, all of which are canceled due to the shutdown. So how important are these reports to investors and what does it really mean if we aren't getting them?
B (1:18)
So I'm going to share a couple of quotes here. One may be less familiar and one's probably pretty familiar for most of the listeners here. And they also, I think they kind of describe how I view what's going on. So Danny Kahneman, Nobel winner for economics, for his work on behavioral behavioral economics. He once wrote the following in his incredible book that I recommend to people. It's called Thinking Fast and Slow. The quote is, nothing in life is as important as you think it is while you are thinking about it. Now, that's the less known one. The more familiar one is Peter Lynch. He once said, if you spend 14 minutes a year on economics, you've wasted 12 minutes. Now, I think there's two important lessons for those quotes and they, they overlap here. So Kahneman's quote, it's about our tendency to overweight the importance of things that we're dealing with right now. If we look back in time, we almost never remember what was going on on a particular arbitrary date, even if it was things that felt really important at the time. So I think that that's, that's part of it. But Lynch's point, which he made in that same speech where the quote was before he actually said the quote, is that you can study economics and macro data, all that you want. It doesn't point you towards the opportunities or pitfalls ahead with any degree of accuracy. Let's be honest, economists, they don't predict the future, they explain the past. But that's not to say the data is useless. I don't think it's directionally, directionally helpful for us as investors trying to navigate markets in the near term. But it is really important and useful to thousands and thousands of organizations. Whether it's state and local governments, multinational corporations, small businesses. They use that data to inform their near and long term plans around things like hiring, inventory, acquisitions, expansions, ad budgets, a litany of other things. Data may not help us navigate the markets, but it certainly impacts the organizations, many of which that we invest in, operate in the real world and make important decisions.
