An Excerpt from Barron's "The Looming Question About Russia—and Other Analyst Insights"Feb. 25, 2022
Beware ‘Men of Destiny’
Cumberland Advisors Market Commentary
by Cumberland Advisors
Feb. 24: Our U.S. equity exchange-traded fund portfolio is overweight the aerospace/defense sector. We have continued to emphasize the overweight for some time. We see every reason to continue it.
Europe and the old Warsaw Pact lines are one of the reasons. South China Sea and China-Taiwan are another. We do not expect any of the pressures on the U.S. defense budget to prevail. We do expect the defense appropriations to be enlarged in 2023 and beyond. Footage of tanks makes for TV drama. Drones and cyberwarfare are the substance, and American companies have an expanding role in protecting the Western alliance.
Putin doesn’t care about [the Ukraine invasion’s] economic impact on Russia. His citizens care but have little say in the matter. Former Australian Prime Minister Kevin Rudd used a term in a Zoom call that I was able to participate in. He identified both Vladimir Putin and China’s Xi Jinping as leaders who see themselves as men of destiny. He explained how men of destiny become interested in geography. From the time of the wars between Persia and Greece until today, 2,500 years later, history has shown that leaders with power ultimately focus on geography.
Paul Schulte of his eponymous research firm wrote, “A backup in yields? A slightly inverted curve? Who the hell cares? This is nothing when compared to the control of Ukraine. Falling stock market? Putin does not give a crap.”
--David R. Kotok