A historic moment – overlooked

By | June 18, 2018

The past week has been nothing short of major news, and yet S&P 500 ended the week effectively flat.

First was the spat at G7: I guess Justin should have given Don a heads-up: ” by the way Don, I have to act tough in the press conference so I may use some words that is not entirely what I believe here!”, apparently he did not mention a slight bit to Don which invited the Cat5 Twitter war upon himself. He should have known better. Canada deserves someone more experienced (I am kidding). I just think that Canadians could use some more capable PR or diplomatic team to handle it , incorporating the counter-party’s demeanor , not just following a rigid playbook.

Then Don and Kim shook hands.

Jay Powell announced another 25 bps rate hike.

US and China started trade frictions again

AT&T was approved to buy Time Warner by the judge.

If you really look for the real historic moment, it has to be the handshake between North Korea Leader Kim Jung On and United States of America’s President Donald Trump.

You can mark my words: many years later, all these things will not matter except this handshake. We won’t remember what kind of Twitter war we were spectating between Don and the G7 leaders, we wont remember what level of Fed Funds Rate before and after the Fed’s meeting, we won’t remember this week we saw AT&T’s acquisition of Time Warner approved by the Judge.

This handshake is as significant as the handshake between Mao and Nixon. It marks the end of an era and beginning of something new, something much brighter. Interestingly for various reasons, most political bias, the main stream media in US is either quiet about this meeting between US and North Korea, or being extremely skeptical about what actually happened and some main stream media even saying that it is a mistake for such handshake to happen. No, not meeting North Korea is a mistake.

I think no matter what happened at the meeting, any reasonably objective person can conclude that the nuclear warheads between North Korea and United States are one step further not closer from each other. The chance of massive self-destruction of human race is ticking a lot lower not higher, the world is more likely not less likely to welcome a new member called North Korea to join the modern family of nations.

Maybe we are still 3 decades away from observing the full benefits to world economy from this week’s event: Mao and Nixon met in 1972 in the darkest days in Chinese’s post civil war history- Cultural Revolution movement. But that handshake signified that some change agents are shifting and the whole situation is moving towards a better future not a darker future.

    

All these meant little to speculators or day traders and they are more interested in betting next Fed rate hike or non-farm payrolls number. But to long term investors, such events are setting the tone to your next few decades: are you going to underwriting a higher chance of mess casualty event or you want to say such events are more remote and you can focus on the prosperous future for US, for China or even, for North Korea?

Maybe it is really what Julian Robertson said: Donal Trump deserves a lot more credits for what he has achieved than what he is getting now.

We agree.

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