Stock Investments in an Antitrust Era

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Dear fellow investors, Lina Khan is being appointed to the Federal Trade Commission by President Biden’s administration. There are rumblings of resistance from Republican Senators like Mike Lee from Utah. This missive is devoted to helping our investors understand these matters and the impact this could have on stock market returns over the next ten years. Remember, the key to success in common stock ownership is avoiding stock market failure.

Those of you who know us well understand why we don’t concern ourselves with politics. We work for clients on both sides of the aisle and intend to succeed in eras dominated by both political parties. Therefore, we will provide these thoughts and readers can use it for informational purposes.

Lina Khan has distinguished herself over the last 10 years as an expert in antitrust law. We believe she understands the Sherman Antitrust Act of 1890 and that she could be a very important educator of the body politic on both sides of the political spectrum. What does she know and why should you care?

In the book, Breaking Rockefeller, author Peter Doran explains the history and the purpose of the Sherman Antitrust Act. John Sherman was a Republican from Ohio who left the Whig Party in 1850, along with Abraham Lincoln and others, to form the Republican Party and oppose slavery in the U.S. He was very concerned with anything which could ruin this experiment in Democracy and Capitalism. His key quote from the 1880s was, “The popular mind is agitated with problems which may disturb the social order, and among them all, none is more threatening than the concentration of capital in vast combinations.”

If you lived in Seattle for forty years or lived in Minneapolis or San Francisco or New York City or Chicago, you know that the social order has been disturbed. People on the far political left and the far political right feel disenfranchised and have been disturbing the social order. In the process, some of our grandest major cities have been turned into ghost towns.

Doran’s book went on to describe the resistance of the time. “At least initially, the federal government was wary of challenging Standard Oil. Sherman pushed hard to change the fact. Ever so slowly, through his impassioned speeches, and through the scrupulous investigations of congressional committees, his assault coalesced in a sweeping piece of legislation.” Today’s resistance is similar, and today’s congressional hearings are led by Representative Dennis Cicilline from Rhode Island. He totally gets the spirit of the Sherman Act, as do many Republicans like Senator Josh Hawley, and so does Lina Khan.

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