The period of relative calm in the markets was rattled by an endless stream of provocative tweets from US president Trump as the US government ratcheted up the trade war and tech war against China. Oh boy! Did the global media have a field day on this latest development. Some of the headlines were more fear-inducing than horror movies. Droves of analysts, experts, economists, fund managers, talk-show hosts are talking about an impending recession in 2020. Or was it 2021? Sorry, these people keep changing their minds. Everything seemed rosy and bright between January and April, remember?
Look, don't get me wrong. I'm not saying that the trade tech war is a non-event. You should be concerned if you have huge positions in shipping and tech/semi-con stocks. However, there are lots of other industries not even remotely affected by this. It's business as usual for these sectors. Life goes on. You won't hear Marvel fans saying "Hey honey, let's not watch Avengers: Endgame at the cinema because some intelligent people said a recession might be coming."
Many investors still do not understand that stock prices fluctuate all the time. Sometimes, they fluctuate more. This is not the first trade war the world has experienced. The US waged a trade war against Japan and a Cold War against the USSR back in the 1980s. Strong, capable management will adjust and work out solutions over time. They always do. Kerry Logistics, a Hong Kong firm, has said that trade tensions are actually boosting activities in Southeast Asia. Which S-REIT has lots of warehouses in the SEA region? Yup, you've guessed it! Mapletree Logistics Trust. It's unit price has been rather stable ever since the trade war erupted, closing at $1.48 on 10 May before the avalanche of Trump tweets and closed at $1.49 today.
1 comment:
It is particularly true that columnist, analysts and talk show hosts could not be taken too seriously. At the end of the day, they got paid for sales, and emotions like greed and fear sell best. It is so ironic that when some experts said particular stocks would go up and they didn't hold any.
What you said was so true, I was also affected by the trade war fear and had no interest in instruments related to manufacturing in China. Maybe it is time to take a step back and think more.
Still, even if an economy behaved bad, some others could always benefit from it say the nearly countries with lower cost labour. The markets and corporations can find a way to survive and thrive.
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