The two conditions are usually unrelated. Mr. Market is concerned most with the question of whether, in 6 to 12 months in the future, economic conditions will be better or worse. More specifically, an investor continuously makes a judgment about the probable progress of individual companies, industries, and the economy, or the lack thereof.

If most investors really believed that riots will increase and unemployment in the US will continue or rise through year end, the market would be plunging rather than rebounding. But that means absolutely nothing about the person’s heart and soul.

Consider the history leading up to World War II and its beginning.    In spite of the War in Europe beginning in September, 1939, our US Dow Jones Industrials Index lost only about 2.9 percent that year. In 1940, as we began to arm our Allies to fight the Germans, uncertainty weighed heavily and the market fell further. Most of the investment losses had already occurred by the time Congress declared war on Japan on December 8, 1941 and then Germany.

The first months of our engagement in 1942 were disastrous. Germany and Italy continued to conquer Europe and North Africa while Japan was repelling US and British forces in the Pacific. Nevertheless, the Dow Index began its upward trend in May, 1942 and rose 25 percent by year end. Market movement is first and foremost about the direction things are pointed, always looking ahead by a number of months.

I think that is what is happening now. We had an instant recession. Only time will tell whether we have made wise pandemic policy decisions or not. But reasonable people are optimistic about having a positive direction by the fourth quarter and into 2021. And this should be rewarded no matter who becomes President next January. Caveat: this is no way means that we will not experience another significant drop or two, especially as the actual revenue and profit reports come in later July and August. I will be surprised if there is not more turbulence ahead.

One must have a basic attitude of optimism about one’s world environment in order to invest either through lending money, debt or fixed income, or owning a piece of a company, stock equity. Warren Buffett, the Oracle of Omaha, will be 90 years old in August, but he is investing in the people and ideas he believes will make a positive difference during the next several decades.

That is what allows him to give billions to charities. Socialism never produces any extra resources with which to solve major problems of humanity.