Wednesday, November 09, 2016

Triumph of the Trump !

What an amazing year ! We've got the election of Duterte, Brexit and now Trump.

Let's talk about what investors should consider next.

Unlike the liberals who will spend the rest of the day depressed over the US elections, I don't think that Trump is crazy. He carefully crafted a message for white voters and thrashed Clinton at the polls. And I doubt any family man wants to be remembered as a Hitler-like personality given that his kids will have to live with that in the future.

This means that while there will be bargaining opportunity in the markets but the bargain hunt may be short-lived.

Value and yield investors should act quickly to buy up stocks which have been beaten down today. If it is anything like Brexit, some capital will move to Singapore which is already a fairly cheap market by international standards and we may even see a rebound over the next few days.

Of course, none of us have a crystal ball to conclude what would happen to the markets over the longer term in a world of Trump, Xi and Putin. I am confident that most intellectuals have underestimated Trump, the US has enough checks and balances to keep things running smoothly, in fact, the US will experience a lot of fiscal stimulus to upgrade its infrastructure in rural areas.

Singapore can take comfort because we've always adapted to whoever is in charge of the superpowers. We have the social capital and the educational investment to make the smartest choices.

This can come in the form of a greater pivot towards China or negotiating more trade deals since TPP is likely dead in the water.  

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