The expression “May you live in interesting times” might sound like a blessing, yet it is often viewed as a curse. ‘Interesting times’ in historical terms usually refers to time periods that were compelling enough to appear in history books. These are often characterized by war, conflict, and disorder. The so-called non-interesting times are characterized by peace, abundance, and tranquility.
From a portfolio management perspective, time periods described as ‘interesting’ are also the most tormentous periods for investment returns.
From a portfolio management perspective, time periods described as ‘interesting’ are also the most tormentous periods for investment returns. It’s times like these that a family office with a team of experienced portfolio managers and analysts is worth its weight in gold. So, the question is: are we living in interesting times right now? Will future PhD history students concentrate on studying and writing about the next 50 years? In our view, the answer is an unequivocal yes.
Representatives from Northland Wealth Management’s investment committee attended an annual general meeting in Washington, DC for an alternative asset manager which we invest with on behalf of the families we serve. On the same trip, we visited other managers within close proximity of the White House.
The highly qualified speakers included former Director of the National Security Agency (NSA), General Keith Alexander, and former NATO Supreme Allied Commander, Wesley Clark, among other thought leaders noted below.
The main themes covered were: U.S. - China trade, increased scrutiny of tech firms, Washington’s dysfunction, and the future of democracy. There is a broad concern and skepticism toward the Chinese government, their ambitions, and motivations. The U.S. administration understands it can inflict economic pain, but may have underestimated the Chinese’ ability to play the long-game. If anything, this makes the Chinese economy more resilient and underscores the need in their minds to forge a different path than reliance on the U.S. Other countries like Russia, Iran, and North Korea were also punished economically, but they still stand.
On U.S. tech firms, former U.S. Secretary of Treasury and former President at Harvard University, Dr. Lawrence Summers commented that “any strict regulation on Google, Facebook, etc., by the U.S. administration would be like shooting themselves in the foot. The sector has been a beacon of growth and pride - it shouldn’t be constrained”.
Chairman of the Senate Judiciary Committee, Senator Lindsey Graham (R-SC) was optimistic that a great bargain can be achieved on immigration. Both sides are willing to compromise as the topic is too important to ignore.
Former Mayor of Chicago, Rahm Emanuel, who was previously Barack Obama’s Chief of Staff, argued that Trump is very smart, in tune with the populace, and shouldn’t be taken lightly in 2020 - it’s his election to lose. The key to winning is to co-opt the suburbs and align their votes with the urban populace, which often votes for Democratic candidates.
On democracy, there was a general sense that the polarized system we have now is
unsustainable, and that at some point the nature of our governing system will have to adapt to autocratic rulers in China, Russia, and other parts of the world.There’s a fear that in the 2020 election the U.S. could shift ideologically from the right, to the far left.
There are opportunities that present themselves when political and economic conditions gyrate.
There are opportunities that present themselves when political and economic conditions gyrate.These solutions in Washington DC focus on regulatory arbitrage, specifically as it relates to the financial sector.
At Northland Wealth, we have a philosophy of building portfolios that will be resilient to interesting times, but also attempt to take advantage when opportunities present themselves.