May Day, Reimagined

Today is May 1, a day that’s also known as “May Day” in many countries around the world. Think of May Day as a sort of Marxist version of the same holiday we celebrate in the United States called Labor Day. Now, when I say a “sort of Marxist version,” I am not being at all hyperbolic. You see, in 1889, an international federation of socialist groups and trade unions designated May 1 as a day in support of workers, and it did so in commemoration of the Haymarket Riot in Chicago in 1886.

These socialist groups were in essence Marxist, although they organized themselves under the umbrella of greater workers’ rights (a worthy objective in theory). Yet the underlying philosophical premise behind socialism is that the means of production should be owned or controlled by the state, and not by the capitalists. This, according to Marx, should be implemented for the benefit of all, and is part of a natural transition from capitalism into a stateless and classless society without private property.

“Workers of the world, unite!” is the slogan from Marx and Engels’s “The Communist Manifesto,” published in 1848. It means that the working class should work together to get rid of capitalism — and the capitalist producers — and win a class war. And make no mistake; that concept is at the philosophic root of May Day.

Well, to me, this thinking is supremely flawed, and that means that May Day requires a reimagining into what I think is a far more appropriate celebration.

So, I propose that we in The Deep Woods community promote May Day under a new name, “Capitalist Day.”

By capitalist, I am referring to anyone who works hard to create wealth. Anyone who has made the noblest of choices, the choice to cast their mind, body and spirit into the world in pursuit of productive achievement of the sort that creates the goods and services we need to survive and thrive in a hostile environment.

Make no mistake about it, the world is a hostile environment. Before there were any dinner tables, grocery stores, electrified homes, televisions, internet, etc., there was the cold, harsh and unforgiving state of nature. Yet in the face of this adversity, a producer of goods (aka a capitalist) chose to forage ahead and mold reality into all the comforts we enjoy today, and that Marxists around the globe all-too-often take for granted.

Now, one might argue that as Americans, we have been blessed with incredible natural resources and that we should thank the heavens for this blessing. But I see it differently.

In my view, natural resources are neither natural nor resources. It takes man’s mind to create resources from nature.

Think about it. Nearly every value you hold as a human — safety, security, shelter, clean water, ample food supply, the ability to traverse the globe — indeed, modern civilization itself, is made possible by a thinking human’s efforts to produce such things.

It’s man’s mind; his reason, ingenuity, science, hard work and capital, put in the service of his attempt to achieve values, that is responsible for your worldly bounty. And this bounty is the virtuous result of man’s ability to shape nature into the byproducts of his will.

So, today, as you see the world stage protests and demonstrations around May Day, I want you to reject this paradigm and celebrate “Capitalist Day.”

Even better, if you also are a capitalist/producer (and if you are reading this, I am fairly certain that you are), then take a moment to celebrate yourself.

You’ve earned it.

ETF Talk: Being Prepared for Anything with an Insurance ETF

There is a famous saying that has been floating around the internet regarding the “Five Ps of Survival”: Prior Preparation Prevents Poor Performance. That is, if you study the ways in which whatever you are planning will go wrong and take steps to prevent them, the chances of something bad happening will be greatly reduced.

Indeed, a glance at any major newspaper only serves to underscore the notion that we live in an uncertain world. The war between Russia and Ukraine is continuing to rage, as is the conflict between Israel and Hamas in Gaza. Both seem unlikely to end anytime soon, and the effects of these conflicts are being felt far beyond their borders. Indeed, the International Monetary Fund (IMF) reported that the world economy is “limping” from the effects of high interest rates and the conflicts in both regions.

It should come as no surprise that the insurance industry is reacting to the world’s uncertainty with changes of its own. A report by a team from Deloitte noted that the field, in the face of frequent and more severe risks, is undergoing a shift from reacting to risks (the old model) to launching “transformation efforts aimed at preventing losses from happening in the first place” through “influencing and propelling … decisions and strategies of clients.”

Given the presence of all this uncertainty, as well as the dynamic changes underway in the insurance sector, it might conceivably be wise to have some insurance protecting you, those closest to you and your assets from disaster. An exchange-traded fund (ETF) dedicated to insurance, iShares US Insurance ETF (NYSEARCA: IAK) recently had a very strong first quarter.

IAK is an ETF that is focused on the small-cap part of the insurance sector, including insurance companies, property and casualty insurance companies and life insurance companies. All stocks in the portfolio are market-weighted and subject to a cap of 22.5%. In addition, to qualify for inclusion into IAK’s portfolio, companies must have a market cap of at least $250 million.

Some of the firms in IAK’s portfolio include Progressive Corporation (NYSE: PGR), Chubb Limited (NYSE: CB), Travelers Companies, Inc. (NYSE: TRV), American International Group, Inc. (NYSE: AIG), Aflac Inc. (NYSE: AFL), Allstate Corporation (NYSE: ALL), Prudential Financial, Inc. (NYSE: PRU), MetLife Inc. (NYSE: MET) and Arch Capital Group Ltd. (NASDAQ: ACGL).

As of April 30, IAK has been down 4.90% over the past month and 4.76% for the past three months. It is currently up 11.90% year to date.

Chart courtesy of www.stockcharts.com

The fund has amassed $616.34 million in assets under management and has an expense ratio of 0.40%.

Overall, the IAK ETF may be a good choice for investors looking for exposure to the insurance sector, but it’s important to carefully consider the risks and potential returns before making any investment decisions.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to email me. You may see your question answered in a future ETF Talk.

In case you missed it…

When Mises Met MMA

It’s not often that you hear the brilliant Austrian school economist Ludwig von Mises referenced in the public sphere. And it is particularly unusual to hear him referenced in the aftermath of two men engaged in brutal mixed martial arts (MMA) combat. But that’s exactly what happened on April 14, when Brazilian fighter Renato Moicano, fresh off his impressive defeat over Jalin Turner at UFC 300, gave Mises a “shout-out.”

Here’s the family friendly version of what Moicano yelled out to the crowd in the post-fight interview with MMA commentator and podcaster supreme Joe Rogan:

“I love America, I love the Constitution… I love the First Amendment… I want to carry… guns. I love private property. Let me tell you something. If you care about your… country, read Ludwig von Mises and the six lessons of the Austrian economic school.”

If you want to listen to the unedited version in all its passionately profane glory, click here, but be warned that it is NSFW (not safe for work).

Now, I did not watch UFC 300 that weekend, as I was attending my favorite sporting event of the year, the Long Beach Grand Prix.

Your editor enjoying the fast action at the Long Beach Grand Prix

I did, however, get a slew of text messages that night about Moicano’s Mises shout-out from multiple friends, who asked me basically the same version of the following: “Did you see that, Jim? Moicano sounds like you!”

That night, I had to look up the clip, as it went viral for its unique and passionate message. Indeed, the clip even made it to intellectual circles, with the likes of Dr. Jordan Peterson commenting on what Moicano said.

“This is unspeakably great,” commented Peterson, who went on to write via Twitter: “What a world. The satirists are Christian; the left shills for Big Pharma and the deadly boxers have become profound economic philosophers.”

And in a testament to the power that social media connections bring, Moicano then replied on his Twitter feed to what Peterson wrote, saying: “I cannot believe Jordan Peterson the man himself retweeted this!!! Thank you so much doctor Peterson.”

The Mises shout-out also was celebrated by the Mises Institute, a thinktank devoted to promoting “Austrian economics, freedom and peace.”

Here’s what the Mises Institute had to say about Moicano’s message:

Moicano’s endorsement of Mises is a credit to the growing Austrian economics movement in Brazil, which has not only enjoyed success within universities and the political system but also culturally. Despite the imposition of socialist president Luiz Inácio Lula da Silva, and the extreme crackdown on free speech being imposed on the nation through the court system, as highlighted by Elon Musk and journalists on X, the Menos Marx, Mais Mises movement that captivated Brazilian politics in 2016 continues to bear fruits.

Increasingly, MMA has become an arena for free thinkers to push back against progressive ideology across the globe. The UFC was among the first major brands to push against covid tyranny, and a number of its fighters have utilized their podiums for political messages that go against corporate-approved narratives. None, however, are as subversive as promoting the wisdom unique to Mises and the Austrian school.

Now, if you’ve been a reader of The Deep Woods for even a short time, you know that I love to bring the realm of ideas into seemingly disparate fields of human endeavor, and that’s exactly what Moicano did with his Mises shout-out on that Saturday night.

But what is all the fuss about? What are these “six lessons” being praised by a professional athlete from Brazil?

As the Mises Institute writes: “The ‘Six Lessons’ Moicano references is the book Economic Policy by Mises, which was one of his most successful popular books. Republished in Brazil as ‘Six Lessons,’ Economic Policy covers important topics such as capitalism, socialism, inflation and more.”

Fortunately, the Mises Institute has made it easy for us to read Economic Policy for free, and I recommend you do so, as it will widen your thinking about the importance of these ideas to a well-functioning society.

Hey, if a mixed martial arts champion can devote time to reading, understanding and promoting Mises, surely you can, too.

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Sowell’s Superpower

“We seem to be getting closer and closer to a situation where nobody is responsible for what they did but we are all responsible for what somebody else did.”

–Thomas Sowell

The brilliant economist’s superpower is putting truth into pithy yet eminently profound intellectual bites that even the most emaciated of minds can find nourishing. Here, Sowell’s superpower is on full display as he critiques the current cultural notion that responsibility is everyone else’s domain but yours. Love you, Tom Sowell.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods