The voting machine

A historic move yesterday: the S&P 500 opened up 1.4% and finished down 1.5%. Such intraday reversals are extremely rare — the last comparable ones occurred on Liberation Day and during the Covid crash.

NVIDIA’s excellent results were not enough to calm markets. Some investors viewed the numbers with suspicion, others simply took profits, assuming it may not get any better for the company. At the same time, uncertainty around future Fed action — fuelled by inconclusive job data — falling crypto prices, and heavy passive flows hitting a market with thin liquidity all added pressure.

With Asian markets and European equity futures in the red, it seems global stocks are heading for their worst week since April. It’s a timely reminder of Benjamin Graham’s famous quote: “In the short term, markets are a voting machine; in the long run, a weighing machine.”

At ECP, fundamentals and valuations remain our compass. We continue to build portfolios around solid companies with strong earnings power and reasonable valuations — an approach that allows us to stay focused on the long term and maintain a healthy distance from the daily noise.