Fisher Investments Reviews the Danger of Political Biases in Investing

You got a lot of people now who weren't upset a few years ago when we had President Biden and a Democratic House and Senate, but are upset now when you have President Trump and a Republican House and Senate. And the difference, of course, is ideology. And people on one side of the ideological spectrum tend to think people on the other side of the ideological spectrum are wrong, terrible, evil— whatever it is they think. But a point that I have made for decades is it is always a mistake in investing—not non-investing, but in investing— to let yourself be influenced by your own ideological views. We all have ideological views. But when you do market analysis, you're best served always by purging yourself of them.

Now, you get a further wrinkle when people want to talk about the Supreme Court, which they now see—if you're on the left— as biased by being basically Republican appointees with a tail—six and three. I want you to be a little more what I would view as respectful here. Supreme Court justices, for the most part, are not dealing with what you think they are. I don't have the last couple of years stats in my head. But over 90% of cases that are brought before the Supreme Court you never read about and are determined nine-zero. It is only a small percentage that aren't. And a lot of those aren't determined the way you think they are. By some —the conservatives do it this way, and those on the left do it the other way. When that happens, the media shoves it in your face to try to make you either gleeful or gloomy. But the fact is, the justices take their jobs pretty seriously.

Now, before you ever even get to that point, I want to make a different point completely. And I've said this again for decades. Markets are only really concerned about intermediate-term profitability, roughly the next 3 to 30 months. Roughly. Sometimes a little sooner, sometimes a little longer. But it's usually someplace in the middle of that 3 to 30 months that markets are pricing. When you think about a court case, it takes an extraordinary emergency to get the Supreme Court to pay attention to it anytime soon. Almost everything starts off in federal court. The claimant and the defendant are both going to argue this is an important thing. The claimant is going to typically say, you know: "I want this here and now", and the defendant is going to typically say: "I want this case thrown out here and now". But unless there's a good reason for either, judges tend to have the view: "I'd like to slowly hear this matter and see what's really real and what the deal is." In a typical federal court, a trial is going to take a couple of years. And then you can appeal. And the appeal is going to take a couple of years. And that's before you ever apply to the Supreme Court. Is any of that within the next 3 to 30 months? No.

Yes, if there's a super emergency, it can be heard sooner. Like, for example, when we had the infamous 2000 election with the hanging chads in Florida and all like that. But that's the exception. That's not the rule. It takes something like the case that was brought up in the last year's cycle, the so-called Chevron case about regulatory. That was years and years and years in the making, not the next 3 to 30 months. That's my point.

So getting excited about these things is not so much of an issue. Now, there is the issue that one party—House, Senate and Presidency—can create lopsided legislation. That's absolutely possible. Is that likely now, as people get excited about it again? That people get excited about that as a negative are mostly going to be on the side that lost the election this last time. That's always the way it is.

But in this election, maybe not so much. Why? Because the Republicans have almost no margin in the House. And you all know that. I think maybe you forget about it, but the House is really the one that's the sticking point here. The fact of the matter is, Republicans lose two votes. You know, in the Senate, they could lose all four because the vice president could swing it. They could lose their four-seat victory if four Republicans didn't vote their way, and you'd still have balance. And the vice president—in this case would be Vice President Vance—would be able to swing the vote the same way Kamala Harris was able to swing the vote when she was vice president. And the Democrats would lose one vote or two votes.

So, what I'm trying to get to you is the odds of all these things being terribly untoward in the period ahead are very low. Can extraordinary things happen that require the Supreme Court to hear something in a super hurry? Yes. That's possible. It's also more probable that it isn't necessary at all. So, I think this is more a matter of—which is really normal—them that lost the election become concerned about what happens in the period ahead. Because they see everything about their ideological opponents as bad.

But I just want you to get the notion: When we had President Trump— President Trump the first time around— and people on the ideological left in America thought those kind of things, the market did pretty well. Was it perfect the whole time? No. 2018 was a negative year. But 2017 and 2019 and 2020 were pretty good years in the market with volatility. And President Biden was there with the Democratic House and Senate. We had pretty good years, including his inaugural year. I just want you to appreciate that, and that this concern is probably overdone.

Thank you much for listening to me. I appreciate you paying attention. I appreciate your interest. Thank you. Have a great month.

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