For better times

Life is not only about money. And while this blog has its focus on it, today I’d like to share a poem that moved quite some people on the inauguration day of the 46th President of the United States.

“The Hill We Climb”
Amanda Gorman

When day comes we ask ourselves, where can we find light in this never-ending shade? The loss we carry, a sea we must wade. We’ve braved the belly of the beast, we’ve learned that quiet isn’t always peace and the norms and notions of what just is, isn’t always justice. And yet the dawn is ours before we knew it, somehow we do it, somehow we’ve weathered and witnessed a nation that isn’t broken but simply unfinished.

We, the successors of a country and a time where a skinny black girl descended from slaves and raised by a single mother can dream of becoming president only to find herself reciting for one. And, yes, we are far from polished, far from pristine, but that doesn’t mean we are striving to form a union that is perfect, we are striving to forge a union with purpose, to compose a country committed to all cultures, colors, characters and conditions of man.

So we lift our gazes not to what stands between us, but what stands before us. We close the divide because we know to put our future first, we must first put our differences aside. We lay down our arms so we can reach out our arms to one another, we seek harm to none and harmony for all.

Let the globe, if nothing else, say this is true: that even as we grieved, we grew, even as we hurt, we hoped, that even as we tired, we tried, that we’ll forever be tied together victorious, not because we will never again know defeat but because we will never again sow division.

Scripture tells us to envision that everyone shall sit under their own vine and fig tree and no one should make them afraid. If we’re to live up to our own time, then victory won’t lie in the blade, but in in all of the bridges we’ve made.

That is the promise to glade, the hill we climb if only we dare it because being American is more than a pride we inherit, it’s the past we step into and how we repair it. We’ve seen a force that would shatter our nation rather than share it. That would destroy our country if it meant delaying democracy, and this effort very nearly succeeded. But while democracy can periodically be delayed, but it can never be permanently defeated.

In this truth, in this faith, we trust, for while we have our eyes on the future, history has its eyes on us, this is the era of just redemption we feared in its inception we did not feel prepared to be the heirs of such a terrifying hour but within it we found the power to author a new chapter, to offer hope and laughter to ourselves, so while once we asked how can we possibly prevail over catastrophe, now we assert how could catastrophe possibly prevail over us.

We will not march back to what was but move to what shall be, a country that is bruised but whole, benevolent but bold, fierce and free, we will not be turned around or interrupted by intimidation because we know our inaction and inertia will be the inheritance of the next generation, our blunders become their burden. But one thing is certain: if we merge mercy with might and might with right, then love becomes our legacy and change our children’s birthright.

So let us leave behind a country better than the one we were left, with every breath from my bronze, pounded chest, we will raise this wounded world into a wondrous one, we will rise from the golden hills of the West, we will rise from the windswept Northeast where our forefathers first realized revolution, we will rise from the lake-rimmed cities of the Midwestern states, we will rise from the sunbaked South, we will rebuild, reconcile, and recover in every known nook of our nation in every corner called our country our people diverse and beautiful will emerge battered and beautiful, when the day comes we step out of the shade aflame and unafraid, the new dawn blooms as we free it, for there is always light if only we’re brave enough to see it, if only we’re brave enough to be it.

Let it sink

I won’t comment too much on it. It’s beautiful.

Bye Mr. Trump. Bye, to the rest of the Trump family.
The world is moving on.

The first one for 2021

Finally. 2020 is gone and 2021 has begun. And the start couldn’t be more promising. A little rough, and it’s also affecting me and my journey, but promising nevertheless.

Let’s start with the biggest drama, the virus. COVID is not gone. In fact, it seems to get worse, but it’s not that we wouldn’t have expected that. Most of us make a big deal every year at the end of each and every year about things coming to an end, starting new, new year’s resolutions. But in reality, the next day after the 31st of December is just that. Another day. Another sunrise. Nothing more than another shift in the tides of time. So why should have anything changed in comparison with the day prior to January 1st, 2021?

Correct. Nothing changed. COVID is still spreading and to top it off, there seems to be a slightly mutated version of the virus going around. Spreading faster, it seems to be more difficult to track and isolate.

Japan has declared a state of emergency, China is once again shutting down regions, towns, and cities, and even Thailand came back into a de facto lockdown. The authorities are very cautious in not calling it a lockdown, but the measures in place include massive restrictions on travel, business, and semi-curfews. So I guess using the term “lockdown” is debatable, but certainly not too far off.

And of course the big elephant in the room. The US is in its final days of getting rid of Donald Trump. There is no question that he is leaving a legacy, but in my wildest dreams (or should I say nightmares) I wouldn’t have thought to watch the news and to see what is unfolding in the “oldest democracy in the world”. Shocking. But not surprising. I mean seriously folks. Electing a real-estate shark for president, what would you expect? And it’s not just any real estate guy. It’s one of the worst that ever walked the globe.

Trading the future

Having said all that, expectations are positive. We all know, things need to get worse before they can get better, and the way I see it, we are about to reach the peak of the crisis.

Infections are on the rise, but so are vaccines. Several types of vaccinations are being distributed and administered across the globe, and the ramp-up will only get faster from here. We know there is a life after COVID, and it’s clearly visible on the horizon.

MAGA supporters had a short uprising, but it seems they had not enough support, no real plan, and they were badly organized. So this ended rather quickly. The way I see it, all they did was to bring the Republican party on the brink of collapse. This brings not only a definitive end to Trump and his presidency but potentially also to any other political aspirations anyone in the Trump family might have (had).

So, we see all this happening, and we know that the future will be better. Therefore stocks are rising, and investors are preparing for a bright and profitable second half of 2021. And so am I.

Happy New Year everyone.

Will stocks crash if Biden wins?

The presidential election in the US is just around the corner. November is only 3 weeks away. And while early voting has already started in the largest economy in the world, markets around the globe are in full speculation on who might win and how this could effects stocks. The loudest faction is of course the one that is stronger invested. The Republicans. And their argument is the same every four years: If the Democrats win, the economy and stocks will suffer.

Of course we cannot predict the future, but if the past is any lesson, then it’s safe to assume that the comments shared by Republicans are at least misleading, and this is easy to proof. Let’s look at the economies of the last presidents in the US:

Blue stands obviously for Democrats, and red for Republicans. The full article can be found HERE with my thanks to Fortune.com

These numbers give a very clear indication on what kind of leadership inspires growth and success. And it’s not a Republican leadership. Looking at these facts as an investor I certainly support the Biden campaign to emerge victorious, to help the US economy to get back on track, and I don’t worry about my portfolio if Biden gets his turn. If anything, I expect things to improve significantly.

About conspiracy theories

One of the most interesting aspects of any crisis is to observe how people react to it. How does the media report on it? How do politicians act? What does your company do? What are the actions of your business partners, competitors, and colleagues?

For me personally, it is most interesting to observe how friends and connections on social media react. When it’s not about business, but about personal opinions, character, and values.

architectural photography of yellow and brown house

Photo by Tsvetoslav Hristov on Pexels.com

Conspiracy theories on the rise

It’s hard not to notice the surging amount of conspiracy theories. Whether it’s a try to demonizing Bill Gates, or a push against China, the internet and social media are full of it. And while I wouldn’t expect anything else from Facebook (I stopped using Facebook almost 1,5 years ago), I am very surprised to see the same narratives even on a professional network such as LinkedIn.

Well, in the end, we are all just people. But let me tell you that as professionals who trust each other in business matters, it can really profoundly disturb a relationship knowing that the person I am dealing with is eager to spread misinformation, fake news, racism, and/or propaganda. In fact, this is a reason for me to seize doing business with such a person.

Controlling your emotions

As professionals and as investors, a major rule of thumb is to control our emotions. No matter what we personally think about something, throughout our careers we train to learn to follow data, to collect information from other people who are actual professionals in those fields, and then to draw conclusions based on the information we have at hand.

We can, of course, express our opinions, worries, or reasons which lead us to believe something to be otherwise. But this needs to be presented as such. And it’s needless to say that propaganda or racism is a non-negotiable and resounding no-go in any case.

About China

So today, let me address a few points that I read about in recent days. This is to offer some additional perspective on the blame China receives:

  • Wet markets. People are now eager to blame everything on the wet markets in China. Fair enough, according to the current data the virus came from there. But how certain are we that a similar outbreak could not occur in a wet market in Vietnam, Thailand or Cambodia? And how about slaughterhouses in the USA, or mass animal farming and chicken breeding? How about the hygienic conditions across India? There are so many potential breeding grounds for a virus, it’s mindboggling.
    My point here is that instead of generally blaming wet markets in China, we should rather try to identify general root issues and how to address those across the globe. But we can only do it in coordination and exchange with other nations. Our “artificial” borders matter nothing for a virus or any other natural disaster for that matter.
  • China is lying to the world. It might be. Whether it’s deliberate lies or creative interpretations of facts and data, we know that we have to be very careful with any information that we receive. But instead of pointing fingers, the USA and Europe should use the tools at hand to push for more data, to evaluate it, and to coordinate a response. Amazingly enough, we do have a real tool and task force just for that: The World Health Organization, or WHO.
  • The WHO is being controlled by the Chinese. There might be some influence. More, or less. We don’t know at this point. So we shouldn’t declare it as a fact and we shouldn’t reduce the funding to this organization just now. However, every participating and paying country has every right to analyze and evaluate an organization they pay money to.
    But what would be the best way to evaluate the WHO? I would argue that it’s probably not by setting up investigative committees and withholding funding. Instead, it might be smarter to send our own trusted professionals to support the work. By actively engaging in discussions and exchange of information, by ensuring that resources and measures are being directed to where they are being needed, this approach would quickly debunk any conspiracy theories, it would eradicate the finger-pointing and blaming, and it would result in a globally coordinated effort. Unity. Something that is urgently needed to fight a pandemic.
  • China will use the crisis to buy foreign companies. This idea is highly unlikely. First of all, China needs to do its own stimulus efforts to support the economy. Secondly, China needs to prepare itself for the upcoming economic disaster. What do I mean by that?
    Chinas growth this year is estimated to be less than 2%. The last time it was that low was after the cultural revolution in 1977. And this is just the current estimation. The real impact of the crisis and what will follow after that is difficult to predict. But we are seeing first sentiments and actions from entities worldwide already taking shape. Companies from major economies around the globe start moving production facilities out of China or are planning to do so in the foreseeable future. China is being sued by several states in the US for damages. Diplomatic ties are strained. Hostile takeovers of companies in the US or in Europe during a pandemic would only risk an irreversible lost of trust and global backlash which I doubt the country can afford.

I am probably the last person to put China into a positive spotlight. After living and working there for a year I had really enough and I don’t see myself ever going back there. Vacations – maybe. But spreading conspiracy theories and racism based on some shady propaganda and without thinking the arguments through… we are better than that.

Putting the Business Roundtable to THE test

Capitalism. The most successful economic system in human history. With all its flaws, no other system has generated more wealth and elevated more people from poverty to riches. But like every other system, it’s designed and managed by humans, so obviously it will be full of flaws. And there is no better place on earth to observe these flaws than the United States of America.

The richest country on earth, with huge conglomerates and companies that are homes to the richest people on the planet. But after just a month of shutting down their business, these capital behemoths are already asking their government for bailouts.

adventure backlit dawn dusk

Photo by Pixabay on Pexels.com

The importance of emergency funds

Financial advisors usually teach their clients about the importance of emergency funds. Rule of thumb is to have 3-6 months of expenses allocated in an easily accessible deposit account. Whether it’s cash or short term, high-yield savings accounts. Whatever. Point is, that if you lose your job or if there is any other reason for why your cash-flow will get suspended, you should have a quick and easy way to access that cash. So even if your life does get disrupted, you can take the time to fully focus on getting back on your feet.

It’s obvious now that such lessons would be also critical for companies, especially the larger ones. As doors are being shut and balance sheets shattered, mass-unemployment is on the rise and demands for government support is increasing. Again, we are only a month into lockdowns, which may easily extend by another month or two.

Should governments bailout companies?

Governments around the world have responded quickly with stimulus packages, low-interest loans, grants and even direct cash payouts to citizens. I honestly don’t know and can’t think of any other solution for now. But it’s ironic, and funny enough, that even a country like the US, which is currently being led by the republican party, jumps in with help so quickly.

The republicans. Everything they are doing now is against every core principle of how capitalism should look like in a country that devoted itself to that system. Why should the government bailout unsuccessful businesses? A company that fails within as little as a month of trouble certainly can’t be called “successful” or “sustainable”.

Keeping an unsuccessful company alive just to preserve some jobs makes no sense. Wouldn’t it be better to restructure the company or to let it go bankrupt so new, smarter and better competitors get the opportunity to fill the void?

The only way I could imagine this to make any sense is if the government would see opportunities in the business for itself. Then it shouldn’t give any grants either, but rather take a stake in it.

By taking a stake in a company, the government can ensure the operations can continue and support a larger restructuring to put it back on feet. It can also keep better oversight to make sure the money goes to where it’s supposed to go to. Does anyone really believe that stock buybacks and CEO bonuses won’t happen in 2020, while employees are being laid-off, or staff salaries and benefits cut?

I am not alone with this this idea. It has been also supported by Mark Cuban and other prominent voices, who by the way might come up as an independent candidate for the presidential election in November.

The real strength

I think I heard the quote from Howard Shultz:

“It’s very easy to lead when things are going great. It gets really hard when you get headwinds, disappointments, and people are telling you that you’re in the wrong way.”

As of now, the headwinds are really strong for all of us. But it’s also an interesting and exciting time, becasue as investors, right now we can observe easily which companies are on the right track, which can endure hardships, and which have sound business strategies designed to go beyond their quarterly reports and dividend distributions.

We can (and should) also observe which companies have the strength not only to navigate through this crisis but to do so by simultaneously supporting their stakeholders. Keeping employees is just one part. Business partners are another piece of the puzzle. And yes, asking for taxpayers money is also a factor.

Being financially strong means, in my humble opinion, to not need to rely on anyone coming to rescue. Not only that but also to make a point that even if one would be eligible to get benefits, grants or subsidies, this money should be rather distributed to those who really are in need of it.

Putting them to the test

Less than a year ago the Business Roundtable declared the end of shareholder primacy and a stronger focus on stakeholders. There won’t be a better time but now to see who of those who signed the paper really meant it.

The best statement on paper is only worth as much as our actions tell. In good times, and in bad times. The world will be watching.

What would you do…

… if you wouldn’t need to work anymore? If you wouldn’t need to worry about food, shelter, and health, what would make you get out of bed every single day?

As the election in the US is drawing closer, I have spent some nights learning about some of the presidential candidates. The person who is standing out of the crowd for me: Andrew Yang. And even though I don’t think that he will be successful in the current campaign, I believe that his time is yet to come.

His MATH campaign (Make America Think Harder) is clearly not aiming at the people who are currently in power and who will remain so for a few more years – probably. Politics in America are old, white, and corporate. But times will change. All those who cling to power now have a very short candle of life left to burn. Once they’re gone, the change will come.

But politics aside, I want you to think about what would happen if the concept of a universal income for citizens would become reality. How would your day look like?

The Freedom dividend

This concept, also known as a universal income, is not a new idea. Without getting into details, let’s just assume that it’s feasible and you and your partner suddenly start receiving 1.000$ each on your bank account. Unconditionally, on every first day of each month.

That’s 2.000$ for the household a month. 24.000 $ a year. It’s not enough for a “perfect” life, but it’s probably enough to let you stop worrying about food, shelter and to some degree, about health. How would this change your life?

Critics are easy to point out that people would just stop working, stop doing anything for that matter. To a point, this is probably true. People would probably stop doing jobs that pay less than that. For example, service staff in restaurants or coffee shops who don’t even get paid by the hour but rely solely on tips might reconsider their life choices. Employees who get their lives sucked out by unscrupulous managers (*cough*A-m-azon*cough*) might be OK to sacrifice 100$ or 200$ a month to get their life back.

But we all need a purpose in our lives. And while many people think that rich people, those who could afford to hang out on a beach in Bali or the Bahamas all day, are living the dream relaxing and spending money all day long, nothing could be further from the truth. Most rich people work actually quite a lot. The difference is though, that they work on things that they are passionate about. Because they can afford to do so.

Don’t wait for Andrew Yang

The truth is that many skills, many qualities of the past, have disappeared over the years as they proved to be not profitable enough to provide an income for people who practiced them. Artists, handicrafts, social workers, volunteers. The list is long. Some of them were meant to go and nobody will miss them. Others are dearly missed and needed.

So while we wait for this concept to get embraced by nations who can afford it, there is another option to take matters into our own hands and to get the freedom dividend anyway: By investing, and generating passive income.

The freedom dividend is exactly that. A dividend. And you don’t need to wait for Andrew Yang to get it. All you need to do is to start investing in dividend-paying stocks. And while you build up your savings and your passive income, whether Andrew Yang will be successful or not, will not hinder you from achieving the target of getting some freedom back through regular dividend payments straight to your bank account.

Once you get that, you might find your passion in some jobs which are dearly missed and needed, but which are not being pursued by anyone due to low profits and lack of interest from large corporations. The term “retirement” might just then receive a completely new meaning for you and for others…

It’s the final countdown

It’s the end of the 41st week. Only 11 weeks left until the end of the year, and it couldn’t get more exciting. We got the final countdown for the Brexit. The president of the United States is facing a trial of impeachment. Hong Kong turned within a few weeks from an investor’s paradise to the most public and persistent resistance in China. A little girl is speaking up to leaders worldwide and shaming them into their negligence to the climate crisis.

There are so many things happening everywhere, it’s hard to imagine the world could get even more complicated. We got everything. We got hope. We got threats. We got fights. Dramas. Politics. The whole package.

The stock market reflects investors expectations on the future

I was once told that the stock market was mostly a reflection of our economy. I am not the only one anymore who doesn’t believe that this is accurate. Rather I believe that the stock market reflects the expectations of investors. It’s not a real-time reflection of the world economy as it is. It is what investors, people, believe a company (or many companies hence the market) to be and/or to become.

Therefore, when stock markets start to go down and speakers on the news start talking about a recession, it doesn’t mean that things are bad. It means however that people believe things to be or to get bad. They can be right. They can be wrong. As it’s often the case, things tend to happen if only enough people believe in something. And investors play a crucial role here. Because since they are the ones who put money in the markets and control those huge cashflows, they clearly have the power to steer things into certain directions.

In the long-run, however, the truth will out. Because no matter how much anyone would try to trash-talk a company or even an entire market, once the annual earning reports are published and numbers are confirmed, then there is not much left to dispute. This also works the other way round. You can talk-up a company as much as you want. If the numbers disappoint year after year, then the share price will react to this sooner or later.

After rain there is sunshine

So where do we go from here? The world is in tumult and any day now could cause havoc in the markets. We have very high volatility, which means that stocks seem to act not rational and very sensitive to either good or bad news. But looking at the long game, I don’t see reasons to worry just yet. In fact, I am pretty confident that unless something really crazy happens, this year will end so much better than 2018 did.

Stocks from my portfolio that I expect to outperform are Apple (AAPL), The Trade Desk (TTD), AbbVie (ABBV), GlaxoSmithKline (GSK), Imperial Brands (IMBBF), HSBC and Vodafone (VOD).

The US stocks from the mentioned above will present good numbers and solid growth. But the UK stock prices will simply benefit from a rising Pound. As the Brexit saga is coming to an end, the British currency is set to thrive no matter the outcome. Because while people might be scared about what will happen, the only thing investors really worry about is uncertainty. Once we know what’s going on, we will know how we have to position ourselves.

I feel good times are coming.

Disclosure: I own all stocks mentioned in this article.

Stakeholders are the better shareholders

There was some amazing news coming from Wall Street a few weeks ago. 181 CEOs, members of the so-called business roundtable and representatives of some of the largest companies in the USA, declared that maximizing shareholder value is no longer the single purpose of their companies. Instead, the emphasis would shift towards stakeholders.

I believe that many people out there don’t understand the difference between a shareholder, and a stakeholder. Or they didn’t take the manifest seriously. Otherwise, I have no reasonable explanation of why this fundamental shift in corporate management attitude doesn’t receive more coverage.

Shareholders vs. Stakeholders

The definition of a shareholder is very simple: Someone who owns shares of a company.

The definition of a stakeholder, however, can be very complicated: It’s everyone who is in direct or indirect relation with a company.

This includes the shareholders. But it also includes the employees, business partners, land-owners, basically all who are affected by the companies operations. It includes the entire eco-system in which the company is active, including the environment.

With a similar mindset to the one of thinking global and acting local, a company that takes care of its stakeholders will do its best to contribute to society in every aspect that makes sense and where the company can make an impact within the scope of its operations. Starting with its own employees, support to local governments, business partners and spreading into larger topics and areas as long as they are related to the companies business.

A holistic concept

This is a true game-changer. It acknowledges that a company, any company, carries responsibility towards society as a whole. It assumes the understanding that the companies’ employees are actually a true and real asset and require at least as much attention as its shareholders. It also acknowledges that company profits need to receive a long-term consideration that goes beyond quarterly reports.

Putting stakeholders to the front of a companies responsibilities is a holistic approach to business.

Too good to be true

I had (and still have) some serious doubts when I read the news. Especially when I noted that Jeff Bezos is a signatory of the declaration, my alarm bells went off.

The CEO of Amazon is hardly known to be a person who cares for his stakeholders. If he signs such a treaty, it automatically degrades the value of the paper it’s written on. Jeff Bezos and Amazon have gained amazing success over the years making Bezos the richest man on this planet. But his contribution to the world ends with the shopping experience.

Compared to people like Bill Gates or Warren Buffett, his priorities and philanthropic efforts seem almost non-existent. The most diplomatic word that would come to my mind would be “uninspiring”.

Same would account also for a few other CEOs and companies which have shown little effort in the past to take care of their stakeholders. Is this declaration really going to change it? Or is it just a PR stunt?

Shareholders will profit – in the long run

Time will tell, but I do believe that among many SMEs out there, the idea is nothing new. In fact, most family-run business and small enterprises which are not listed on the stock exchange had this approach on their business cards for a long time. It’s been the large corporations who moved into a questionable and unsustainable business mind – and it’s time that they get back on track.

Being an investor and shareholder myself, you might wonder why I applaud this change. True, some companies might have to review their supply chains, work procedures, payrolls. This might affect profit margins and ultimately the dividends that I collect every month.

But I rather see my dividends growing steadily over a period of 50 years than to read news about how the companies that I am invested in are contributing to environmental destruction, abuse of workers and handling its business partners unfairly, only to secure a slightly higher profit percentage.

The employees are at the heart of a company. Business partners and the environments are the tools, places and customers that ensure it stays in business. The way I see it, putting stakeholders first is definitely a smarter approach to do business and shareholders will profit from it on a much wider spectrum.

Happiness is relative – but money helps

As some of my readers know, I am a frequent visitor to the website http://www.visualcapitalist.com. It offers a tremendous amount of information in a very easily digestible manner: Smart visualizations. Most recently I have stumbled upon this graphic:

world-happiness-map-2019

I like to be very careful with definitions about such basic terms as “happiness” and especially with the criteria that are going into the scoring system. This is because some things one person may perceive as being essential to one’s happiness, but someone else might see it as completely irrelevant.

This graphic has its origins in the https://worldhappiness.report and you can see for yourself how the gathered data has been evaluated, and ultimately resulted in the given scores.

When looking at this report, I can’t help but notice that the happiest places in the world are also the places with the strongest economic status and specifically GDP per capita. This is by no means an accident.

Fact is that wealth, personal or government’s funds aimed at social purposes can contribute to the happiness of individuals in many ways. If you don’t worry about food, shelter, health, and education, life is becoming simpler. Your worries go away, stress levels go down and the future becomes bright. Even if you might miss some good chances along the way, you might still be doing fine knowing that your children have the same or even better opportunities in the future.

So when people say that money doesn’t buy happiness, I would say that this statement is questionable at least. The wealth that is available for your personal use, whether via your own funds or through the support of your government, will produce, statistically, a higher chance for you to be happy. And it is, therefore, no surprise that the happiest nations in the world tend to be among the richest and socially most engaged.

Drama is all around

For anyone who was thinking that 2019 would offer some political stability and economic recovery, the year started pretty awful. Let’s take a look:

  1. Brexit – everything hints at a total disaster with the UKs decision to leave the EU. We can expect high market volatility and a lot of insecurity on how an unorganised Brexit will actually effect everyone.
    My take on this matter: The Brexit will be cancelled. I think everyone already understood, that the British government is not capable of managing something on such a huge scale. For investors, there may be some great opportunities to watch out for: Vodafone offers an all-time high dividend yield of 8,8%, GlaxoSmithKline is at 4,9%, and Royal Dutch Shell (B) is at 6,1%. It might be a good time to take a closer look and risk-oriented investors might consider building-up some first positions.
  2. Trump Impeachment – Another huge topic to look at. The investigation into a Russian collusion is proceeding very quickly and Trumps own people start turning on each other and on Trump. American news outlets don’t give us really any clear picture on what is happening. You can watch CNN or FOX discussing the same issue and you will get completely different interpretations and results depending on the channel you prefer to watch. However, in the end, something big will happen and this end might happen very soon. I am almost certain that we will see things clearing up in 2019.
    My take on this: Politics in the US are seriously messed up and Trump may survive this. If he does, the future is truly unpredictable and even more, I would then expect Trump to even win a re-election. If he doesn’t survive this drama, then we may see markets rise together with democrats regaining power. We would probably see stabilising tariffs, politicians focusing on trade and reducing international disputes and a generally speaking more positive sentiment. I would love to see that happen, but for now I remain sceptical.
  3. Chinas expansion – If you watched Mr. Xi’s New Years speech, you might actually get scared. Telling on television to his own troops to get ready for conflicts, and to emphasise his position about reserving the right to take Taiwan by any means including force is not a small thing. At the same time, we have the South China Sea boiling up, China’s investments in infrastructure and technology projects and companies across the globe, and a stronger than ever buildup of military power, intelligence and provocations with even the mightiest nations in the world.
    My take on this: China got some serious issues to tackle and apparently more and more challenges to control its economy and its population. A dangerous mix that has, historically speaking, often led governments who try everything to prevail in power to do stupid things. What worries me the most is that China seems absolutely not concerned about challenging not only the USA, but also Canada, Japan, all South East Asian nations and even Europe. All at the same time. Their tricky rhetoric and massive cash deployments across the globe are being met with more and more scepticism and might turn into a very negative sentiment by the end of this decade. I have only 1 Chinese company in my portfolio (Baozun) and will probably refrain from any further investments in the Chinese market, until it becomes more clear where this country is actually heading.
  4. European Dramas – with all the Brexit talks, the only other topic in the EU that is still coming up frequently, is Mr. Macron and his failure to find a proper communication channel to the French. The yellow-vest-movement shrank, but turned more violent and could gain new traction at any time. All this happens for one main reason: France is in trouble as its economic numbers don’t match up. But to be fair, it’s not only France. Spain, Greece, Italy… there are tons of problems to tackle and any of these countries could cause a major drama in 2019.
    My take on this: If the Brexit will be cancelled, then Europe will be just fine. On the other hand, if the UK really leaves the EU, the results will be unpredictable. We might see other countries willing to follow suit which could eventually destroy the EU as we know it. In terms of investments however, Europe is a paradise at the moment. So many great and undervalued stocks out there, that it’s hard to list them all.

I will keep it at this 4 points for this post, but there are actually so many other things and dramas to worry about, that there is only 1 conclusion that we can be truly sure off for 2019: It will be an exciting year.

Disclosure: I own all stocks mentioned in this article.