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Does Risk-Aversion to Terrorism Necessarily Extend to Risk-Aversion to Financial Assets?



I'm on board with the idea that an increasing trend towards risk-aversion is a bad thing for most financial assets, as Kevin and Scott allude to. Almost by definition, that has to be the case.

However, I have trouble extrapolating risk-aversion towards being exposed to terrorism to risk-aversion towards being exposed to financial assets.

Maybe Toddo could enlighten us all as to the steps he had to take to enter Israel. I've never been there, but I have seen a number of documentaries on the steps they take to reduce those infinitesimal chances of terrorism. They go way beyond anything we do here in the States, and from what I know (which admittedly isn't much) there aren't a whole lot of Israelites who decry their loss of freedoms when they enter the airport.

Yet, despite today's performance, the Israeli stock market has been a tremendous performer, far outpacing anything we've seen here. Perhaps Kevin or Scott could expand on the reasons why they think taking steps to shore up a haphazard security system might translate to failing financial assets. I'm honestly curious to know if there are any historical precedents. I know we are living in unprecedented times, but wasn't everyone always living in unprecedented times at the time they were living them?

No positions in stocks mentioned.

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