The mess after Trump’s election loss shows America’s strength, and investors need to understand that
- America is open, transparent and willing to air its problems in public, and this can be difficult to understand by those who haven’t experienced it
- It is easy to disrespect the United States, but it is very risky to feel superior and investors must be able to understand the country and its global influence
US President Donald Trump accused Joe Biden of hiding in a bunker during the coronavirus outbreak. Who’s hiding in a bunker now, Donald?
All eyes were on America as the counts dragged on, although in 2000 the result took 35 days. In 1876, it took four months.
For the past few years, the United States has looked like an omnishambles. A country that prides itself on freedom of speech meant that the president was constantly ridiculed about his ridiculing. It was neither distinguished nor respectful, though he brought it on himself.
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As it happened: US Election 2020
To integrate the world’s immigrants and build a unique America, the US is obsessed with fairness, regulation and opportunity, mixed with a liberal use of litigation. Trump’s building walls and his assault on democracy and kindness run contrary to the essential line from Emma Lazarus’ The New Colossus, “Give me your tired, your poor, your huddled masses yearning to breathe free”.
There is no doubt the country’s brashness, interventions and soft-power exports have generated envy, admiration and hate in equal measure. One of my many gloatingly anti-US friends asked whether Americans were more unequal, dogmatic, corrupt, hypocritical and traitorous than other cultures.
The answer is no. Having lived on all the continents except Antarctica and Australia, I can say humans are the same. It’s just that Americans don’t hide it.
America is open, transparent and willing to wash its underwear in public in the name of individualism, free trade and the frontier spirit. This openness can be difficult to understand by those who haven’t experienced it.
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It is an attribute usually seen as a threat. It is exploited by opponents, but it is also America’s strength – forcing periodic introspection, cleansing and renewal in public.
It is even more important today for investors to understand America. Not because the US is the world’s largest economy at US$21.4 trillion, as post-virus China is catching up rapidly and now only US$7 trillion behind, but because it bosses the financial markets.
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The stock market has traded continuously for 228 years, behind Britain’s 450 years but ahead of Mumbai’s 145 and Shenzhen’s 30. Duration and size matter in investment.
The US is 54 per cent of the global equity market and 40 per cent of the global bond market. More important is that the volume traded in 2019 in US equities was US$35 trillion versus US$19 trillion on the major Chinese exchanges.
In 1869, the lawyer John Godfrey Saxe said, “Laws, like sausages, cease to inspire respect in proportion as we know how they are made.” It is easy to disrespect the US but very risky to feel superior.
Richard Harris is chief executive of Port Shelter Investment and is a veteran investment manager, banker, writer and broadcaster, and financial expert witness
