The Ceasefire Bounce: Short-Term Vote or Long-Term Weight? | AWM Insights #247

In this episode of AWM Insights, Chief Investment Officer Justin Dyer and Portfolio Manager Mena Hanna break down the latest market movements in the wake of a global ceasefire and explore what it means for long-term investors. The discussion covers the efficiency of markets, the distinction between investing and gambling, and why discipline is more rewarding than chasing headlines. Whether you're managing generational wealth or simply curious about how to weather market volatility, this episode delivers clear, seasoned guidance to help you play the long game with confidence.

Chapters
(00:00) Market Reactions to Ceasefire
(01:08) Efficiency and Interpretation of Markets
(03:58) Short-Term Versus Long-Term Market Behavior
(05:25) The Importance of Discipline and Long-Term Focus
(07:17) Navigating Volatility and Uncertainty
(09:01) Oil Market Impacts and Inflation Outlook

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Creators and Guests

Host

Justin Dyer

Chief Investment Officer and Chief Operating Officer at AWM Capital

Host

Mena Hanna

Senior Investment Analyst at AWM Capital

What is AWM Insights Financial and Investment News?

A bite sized discussion on timely financial news and investment topics, to help you maximize your net worth and wealth for the next generation with Justin Dyer and Mena Hanna of AWM Capital.

Justin Dyer: Hey everyone.

Welcome back to another episode of a
WM Insights, Justin Dyer here, chief

Investment Officer at a WM joined,
as always by Menahan, our portfolio

manager here at a WM and we're recording
this, uh, what is it, Wednesday?

Um.

April 8th.

Sorry, I was gonna say seventh.

Just gotta double check myself.

And there's a ceasefire in place.

So markets, um, are having a very good
day, at least as of this recording.

I say at least as of this recording,
'cause I think some we'll talk

about here is, um, there's,
there's still a lot of unknowns.

Uh, this was very good news,
um, for today and hopefully

for the not too distant future.

And, and just, you know, uh, as a fan
of, of global peace, um, I would say, you

know, we're, we're in a better position.

Uh.

But there's just a lot,
uh, to unpack here, right?

Markets are incredibly efficient.

Trying to time, this is
super, super difficult.

It came, it came to the, the,
the 11th hour, if you will,

and a ceasefire was announced.

Um, and, and markets really just
take that information pretty

much immediately and update their
expectations about the future.

Markets are great.

Um, are are great places to just.

Assess what's going on?

What, where, what does the unbiased
opinion actually, uh, look like?

Right?

And, and often we say, Hey, what,
what are markets telling us?

And, and we're seeing that
markets are happy right now.

Um, there's, there's still a lot I
think that can, that can unfold here.

And, and we're gonna get into that.

Like, how are we assessing this?

What are the good reminders?

How do we stay disciplined as
long and long-term investors

and not get overly happy?

Now that, you know.

Let's call it, we're in the
clear, you know, I'll, I'll

use the, the air quotes there.

'cause we, we obviously don't
know exactly what, what's gonna

happen over the next two weeks.

So, uh, yeah.

Without, uh, further
ado, let's jump into it.

Mina, um, just, just respond to what I,
what I just talked about a little bit.

Give us your take.

What are you thinking about?

What are you observing?

Uh, what do you wanna
highlight with everything

Mena Hanna: Yeah, I definitely
wanna highlight the point you made

about markets being efficient.

You know, Trump came out and said
when this whole military operation

was going on that he was expecting
markets to be a lot worse and look a

lot worse, and they held up a lot better
than than even he was anticipating.

And that was a decision that he made.

So I think that's so interesting
because markets are constantly

figuring out how they should price.

Obviously companies, how they
should price situations, how they're

thinking about sort of how events
are going to impact earnings.

Because at the end of the day,
everything is based on earnings

and markets have gotten a lot
better at just calling bullshit.

Not sure if I can say
that on, on this podcast.

Uh, yeah.

We're they're, they're, they've
gotten very good at doing that.

It's just a big game.

And they figured out how
to, how to sort of play it.

It's no different than just a mega game
of Kalshi or Polymarket just a bet.

And markets have been a lot better at
making those bets in the right direction.

Yesterday was a great example, like
8:00 PM Eastern was a massive deadline.

Markets started off lower and
actually throughout the day.

Rallied and they finished
mixed like the S&P the nasdaq.

Those were both up.

And that is sort of an indication that
we're seeing markets being a little bit

more efficient, figuring out, you know,
how to delineate and distinguish what's

being said from what's actually going to
happen and make, make the correct bets.

So that's exactly what
we actually want to see.

Justin Dyer: I wanna also.

Further pull on that comment
around markets making bets.

There's a great, um, quote
about markets in the short term.

Short run markets are, are voting
machines in the long term term.

They're weighing machines.

The voting machines, right?

It's, it's really hard to predict
which way markets are gonna vote

on a day, day over day basis.

It's almost like a, a coin flip, whether
it's gonna be positive or negative.

Now that's, uh, let's call it
under normal market conditions,

although that that statistic.

Obviously includes the entire history
of the market, so you know, times

of conflict, uh, times of peace.

Um.

But yeah, over the short
term, they're great.

Um, digesters of this information
exactly like you're talking about,

we then can take that mechanism.

We, as long-term investors working
towards your 100-Year family in,

in the highest conviction, highest
uh, um, probable way possible.

You take, we take that mechanism and then
it turns into this weighing machine where.

The fundamentals truly matter.

Discipline actually wins out.

And, and you, you, you, you are basically
saying, Hey, from the betting machine,

the voting machine, we're turning it
into the casino and, and benefiting

from that over the long term, right?

We always say, Hey, we want to be
the casino, not, not the gambler.

Um, and obviously it's incredibly
difficult to predict and, and, uh,

and markets move exceptionally fast.

So I think it's great to remind everyone,
uh, of those, of those mechanisms and,

and how, how we at least think about.

Or extrapolate the, the short term
nature of what we're kind of talking

about over to the long term, the
a hundred year family, et cetera.

Um, I,

Mena Hanna: yeah, on the, on
the short term side, that I

think that's a great point.

If you are making changes or, or betting
in a way, placing bets that are tied

to these short term events or these
outcomes, that's not investing and

that's not how you should handle your.

Your 100-Year family and your assets and
your ideally generational wealth, that's

not, that's gambling with something
that you shouldn't be gambling with.

Investing is exactly what you said.

Staying disciplined, staying
in it for the long term.

We saw it during COVID.

We saw it in 2022 when there
were multiple wars going on.

Uh, fuel shortages, crazy inflation.

You could have made some money.

I would say that it's probably impossible
to get in and get out at the right time.

And you kind of see that with hedge funds.

Hedge funds had some pretty terrible
years during this period of time.

They're playing the gambling game
constantly, so if the professionals

can't do it, it's definitely not
something that you should do.

And.

You should just focus on what works,
which is being a long-term investor

and focusing on those fundamentals.

Yeah.

Justin Dyer: great, great reminder.

And I just, one, one other thing to add
there is you will hear stories about

people getting it right and if you
actually sift through actual investor

results, you know, the academic world
does this, there's data everywhere, right?

We know.

That, that is likely attri
attributable to luck, not actual skill

where skill is repeatable, right?

So many of our listener listeners,
whether you're on the professional

athlete side or the the non-athlete
entrepreneurial side of things,

skill is what drives true results.

Uh, and I think that's
important to, to underscore, um,

shifting

gears a little bit, but, or rather,
instead of looking backwards,

let's look forward a little bit.

We want to make sure we.

Do a little bit of just at least
kind of caution expectation setting.

We've obviously done that I think
throughout the last, uh, last couple

months 'cause there's a lot going
on and, and just remind folks,

hey, there's still a lot going on.

We are not necessarily in the clear.

Kind of alluded to that early on.

There's a two week ceasefire.

There's still a lot of
unknowns around this.

You know, it's probably
a tenuous ceasefire.

Hopefully it, uh, uh, cooler heads prevail
and, and there's a, there's an incentive

to get oil flowing again, and, and, and
just alleviating the, the cost and, um.

And, uh, negative outcomes
of, of a conflict.

Uh, but I would just say, Hey, there's
going to probably be volatility.

Volatility to the upside.

Volatility to the downside.

Volatility is not just negative, right?

Volatility is, is just
heightened movements.

Um, and what we're seeing at least
today on the news on the back of the

ceasefire is positive volatility.

Um, we, we don't know.

What, how fast kind of oil markets can
then recover oil will probably still be

even more, uh, volatile going forward.

And so, just, just a reminder, right,
let's, let's use that discipline, that

long-term, uh, mindset to, to cope
with what's potentially gonna continue

to unfold over the next couple weeks.

Mena Hanna: Yeah.

And a lot of these attacks and just
the, the situation that we find ourself

in, there was a lot of damage done to
just oil infrastructure in general.

So.

Production figures, the price
of oil and, and we can actually

just see this in markets for the
future, is going to be higher.

Uh, that obviously ties
into inflation, which is.

A metric that we look at extremely
closely and constantly kind of reassess

and, and determine, make sure that we
have the right kind of weather forecast

in a way it's a very short term weather
forecast, but make sure that we are making

assumptions with kind of the right, the
right weather in mind in a way, and.

Yeah, I would.

I would say the only thing that we can
still probably expect is more volatility.

A ceasefire is not a permanent resolution,
and I'd even say in, in the Middle East,

a permanent resolution probably doesn't
mean, doesn't mean much, unfortunately.

So there's just going
to be more volatility.

We obviously are not geopolitical experts.

We're not gonna play that game.

Uh, we're gonna play the game that
that wins over long periods of

time, which is being disciplined
and, and thoughtful investors.

Justin Dyer: Yep.

100%.

Um, I think that's a great place to end.

Um, just looking at actually what
markets are doing right now to it.

It, it's a good day.

So we, we will take it.

Um, it's part of being
a, a long-term investor.

You gotta take the good
with, with the bad as well.

Um.

Probably expect some of those bad days
to, to continue at least, uh, if I

was a betting man, now again, we, we,
we can, we can talk about that and

have opinions, but then we're, we're
disciplined enough to know that the,

that we wouldn't actually place bets
to, to make that come to fruition.

Um, it, it really puts the
hundred year family, your

priorities, et cetera, at at risk.

So, um, yeah, we'll end there.

Um.

Keep the questions coming.

Mina, we'll give the, the number.

Mena Hanna: Yeah.

6 2 6 8 6 2 0 3 5 5.

Justin Dyer: Awesome.

We love answering direct questions, ideas,
que or topics, whatever they may be.

Uh, throw 'em our way.

It helps us obviously directly
speak to you and, uh, um, just

make it a better podcast overall.

So keep 'em coming.

Uh, but again, until next
time, own your wealth, make an

impact, and always be a pro.

Thanks for listening.