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A World Divided By Haves and Have Nots

Yesterday was a special day.

It was special because other than for sports, this is one of those rare days that folks in Singapore care so much about what happen in the USA Presidential Election.

They could choose to eat bad food just so they can keep in tune with the vote counting. When I went over to a vendor presentation, that is what was discussed as well.

I think humans like to see numbers move.

But I also realize how quickly people like to jump to conclusions.

In a short span, we have posts asking us that armageddon is upon us. After one day.

After what happen to Brexit.

This system we operate is far complex then individuals can wrap their head around

We all expect that if A happens, then B happens leading to C and then to D.

And if you are concern with your money, you want to best deploy your money to take advantage, or perhaps safely preserve your money.

Things don’t always work this way.

Even without a presidential change, you can see change in relations whether political, economical and social change within the president’s operating term!

The system of global economics is far complex that you are not going to get that whole ABCD causal chain so well.

If your investment strategy depends on you getting that ABCD so correct and that your investment decision is as sound, then its a very challenging situation to be in.

Politicians Talking and What Actually Happen Are Different Things

One narrative in this election are the groups that have endured President Obama for 8 years, voted for him, and gain little benefits from what he does.

When he got elected, so many of us thought he was going to bring real change.

I grew to realize they are just figure heads.

There are much more kinks in this huge machine that no matter how idealistic, things don’t change like that.

Secondly, politicians job is to firstly get themselves into the office. So they try to appeal to enough voters with different slants to get them into office.

What happens later is vastly different. They could enjoy themselves for 4 to 8 years and then develop a resume for public speaking that earns them so much money next time and you as the citizen won’t benefit much.

It is just like us coming up with juicy click bait headlines to get you in to read these article. That is firstly our job. But no this is not scam. If I don’t get you to start reading, how can you benefit from the value add that I will provide?

It is the same for politicians getting into office.

Going against Confirmation Bias

A lot of people that are not USA or UK citizens cannot believe why citizens will do something that on the first glance, look “totally stupid”

I learn from Brexit that, if I am not a citizen and going through what they face, I wouldn’t know the real narrative. I also fall into the error of looking everything from the prosperity and economic angle.

What concerns people are bread and butter issues.

The way to resolve this, is to read and learn more.

And when we say read and learn more, it is to read the stuff that we most disagree with.

Some simple articles like this is impactful to make me question that perhaps I am not seeing things correctly.

It also corrects some of my wrong notions.

Explaining things in a much Succinct Manner

There will be much summaries by the media deconstructing why this occurs and the aftermath.

You will be more concern about this from the economic angle.

I profess I do not have that good a brain at this point to figure things out. I personally think this is good for the USA stock market, but have no idea how the world markets will react. I personally think Singapore screw themselves with a plan heavy on TPP that now looks in jeopardy and antagonizing China.

The biggest concern, should it happen is Trumps plan to lower tax rate to 15%. Firstly that is just talk, and the actual implementation is another story. However, they are not the only country doing it. Indonesia is also doing this.

Globalization’s bad points are showing up and we look to have more protectionist policies all over.

For Singapore it is challenging. I am talking about the main street here.

We have a low corporate tax and this have attract business to be set up here, recognize income before tax and gaining a 17% corporate tax. This is attractive for many firms and this, and some other tax incentives have kept Singapore employment.

It is probably what I think is the last line of defense.

If more countries successfully attract the income recognition and the jobs back, then what is Singapore’s role?

Whenever I want a more neutral perspective on whether things will affect me in different way, I turned to Cullen Roche from Pragmatic Capitalism.

He has a piece out explaining the aftermath: What Does President Trump Mean for the Economy & Market?

To explain what just happened in a more clear manner, my mentor Mr Howard Marks have put out a piece at his firm Oaktree Capital: Implications of the Election

He has a way of putting things in a clear manner, but also from this article, I understand good investors really read a lot! They can pull out some similarities from past history and thus it is why they are seldom snooked by “what I don’t know what I need to know”

The problem we faced, is perhaps not only the rich and poor divide:

Many are older, white, non-college-educated men who might be described as “demographically dislocated.”  When these men were born, white males ran America; their communities weren’t mixed and becoming more so; and the cultural shifts occasioned by the civil and women’s rights movements, technological change and mass immigration were unimagined.   Certainly the shift to the America of today – with all these things quite different – might be jarring and unpleasant to the people I describe.

At the same time, many Americans – and often the same ones – are experiencing the effects of job loss and diminished economic prospects.  Fifty or even thirty years ago, men without college degrees could easily obtain good-paying jobs and the pride associated with being able to maintain their families at a good standard of living.  One earner per household was enough, and one job per earner.  Strong labor unions ensured adequate pay and benefits and protected workers from too-rapid changes in work rules and processes.

Now the number of unskilled jobs has been reduced by automation, foreign manufacturing and increased globalization of trade.  Unions are much less powerful in the private sector (name a powerful union leader of today who comes to mind).  Men of the sort described above – older, white and non-college-educated – are likely to have lost jobs, know someone who has, or seen the impact on their communities. 

These are the group that is clearly most affected by #1 Globalization, #2 Free Border Migration and #3 Automation. #2 is going to get worse.

Notice its a common theme, even in Singapore.

But #3 is something that will hit us even harder.

Last Word

I spend most of yesterday being fed election results, but majority of my discussion with my peers was the release of financial results.

Kingsmen Creatives, Tai Sin, FCL, Neratel, Vicom are some of the companies releasing results.

The game is still the same for a lot of us. Look at things you can control, that is prospect what is there to buy, what you currently have and make good decisions based on the individual business perspective.

Here is someone also spending his time prospecting something he already owns.

A large part of our lives, we can spend time making decisions that make a bigger impact to our lives. Frugal Daddy here is questioning whether he should accelerate his financial independence plan versus spending more time as a stay at home dad. Perhaps you may offer him some advice.

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