Weekly Thoughts 11 November 2016

I suppose the conversations this week are all around the US President-elect.  I am not too concerned.  In the US and other first world countries, the system is usually bigger than the individual.  Meaning the individual cannot simply do as he or she pleases because there are various levels of government that need to approve things.  Not necessarily so in third countries, as we know.  There were a fair number of opinions from a couple asset managers put out within a day of the election result.  Largely not very negative.  Investec believes that the global economy will continue on its current path of a bit of growth, but see this election result as the continued rise of populism globally.  They were not surprised about the initial market drop but believe that it will make a recovery, much like it did after Brexit.  Nedgroup Investments said that certain pessimistic views are overplayed, as the US, being the world’s largest trading nation, cannot afford to alienate trading partners.

But I think we’ll all just wait and see.  Market declines are only a loss of value on paper unless someone needs to liquidate an investment.  So over long timelines, why even worry to see what that drop is?  And as I’ve said before, these drops create buying opportunities.  Anyway, large multinational companies will continue to sell consumer goods in huge numbers.  Everyone will still go and buy Coca-Cola and plasters and tomato sauce and cigarettes and beer and clothing and so on.  So profits will be made and we’ll all be OK.

A wall on the Mexican border might actually be a good idea, to control the drug trade.  And at least there will be a bit more entertainment than we’ve had in the past when watching a US President speak.  He seems to have tried to start off well with it being obvious that some speech writer put together his ‘acceptance’ speech.