Interesting Views on America by a BBC Editor

It is always interesting to hear their thoughts on the US from foreigners. The views tend to differ based on where they come from. For example, someone from a poor country might consider the US as the best in everything. However someone from another developed country say Canada, Germany, France, UK, etc. might not agree with that assessment completely. Since these countries also are democratic and have political systems and institutions similar to that of the US, it becomes easier for people from those countries to give a better opinion on the comparison. Around Thanksgiving the BBC published a post by Jon Sopel, its North American editor who was returning to the UK after working in the US from 2014. Below are some excerpts from the excellent post from a foreigner’s perspective:

What I’ll miss (not in any order)

Sunshine

National parks and the great outdoors

Skiing in America – so much better organised

Fabulous geographical diversity

Weather reports – so much weather here

Paved cycle trails through stunning countryside

College sport – particularly March Madness basketball competition

Being able to watch all the Premier League football matches you can – even the 3pm kick offs (which you can’t in the UK)

The singing of the national anthem

Burgers and fries

Can do attitudes/innovation

Georgetown

Washington museums and memorials

The device on petrol pump nozzle where it automatically clicks off when tank is full, so you don’t need to keep hand on it (not significant I know)

Epic complexity of Washington politics

Friendliness and kindness

Work ethic

What I won’t miss

Guns – worst bit of my seven years has been going to all the mass shootings

Endless TV ads for prescription drugs promising miracles for first 20 seconds and warning of – in rare cases – catastrophic death in last 20 seconds

Endless political ads during election season that just make you want to live on a desert island

A terrible health system that only works if you have money

Hearing people in front of me at the pharmacy saying they can’t afford the drugs they’ve been prescribed

Seeming lack of interest in what happens in the rest of the world

Restaurants (this is a whole subsection)

– Food that is often too salty or too sweet

– You feel you have to tip 20% cos staff are so badly paid

– Ludicrous hierarchy where you can only talk to waiter/waitress allocated to your table, and not get service from anyone else

– Also why is the person who pours your water never able to take your food order

– Surf and turf – do one, but not the other

– Being asked my opinion endlessly about Charles and Diana/William and Kate/Harry and Meghan – the royal family is an obsession

Source: The America I give thanks for (as I depart), The BBC

A similar topic on reddit a few months received nearly 7,000 replies. You may want to check out: [Serious] Non Americans of Reddit, what is something about America you admire? 

Bull Markets vs. Bear Markets From 1942 To 2020: Chart

The equity market tend to go higher than lower especially over the long-term. In the short-term measured in months or even a few years the market can be volatile and can decline sometimes when it feels like there is no end in sight for the downward trend. Similarly to the benchmark S&P 500, the Dow Jones Industrial Average also has had bull and bear market over the years and the bull market duration and returns have exceeded that of the bear markets as shown in the chart below. From 1942 to 2020, the average bull market has been over 4 years while the average bear markets has been just over 1 year.

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SourcePrinciples of Long-Term Investing Resilience, MFS

So the key takeaway is that stocks never go up forever as some investors currently seem to believe. The wise strategy is to have a solid long-term goal and focus on the returns over many years and not worry about day to day fluctuations. Simply being patient and riding out the down days can lead to excellent returns.

Related ETFs:

  • SPDR Dow Jones Industrial Average ETF Trust (DIA)
  • SPDR S&P 500 ETF (SPY)

Disclosure: No positions

Comparing the Stock Market Weightings of Australia and USA

The US and Australian economies are vastly different. The Australian economy is resource-based and more like the economy of Canada. Accordingly the Australian equity market is also highly concentrated in the mining of minerals and the financial sectors. The US equity market on the other hand has a low weightage of the minerals sector and is more focused on the tech and communication industries.

The following chart shows the comparative weightage of the various industries in the Australian and US equity markets. The minerals and financial services sector accounts for about 55% of the Australian market. The information technology industry constitutes 27% and the communication industry takes up another 10%. Together these two industries amount to about 37% of the market.

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Source: Why does Australia’s skewed stock market underperform?, FirstLinks

Hence the technology focused US market has soared in recent years with the growth in the sector. Similarly when commodities boom the Australian stock market tend to perform well.

For investors in Australia it is smart idea to diversify internationally especially with some allocation to US equities in order to profit from the rise of the technology sector.

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • SPDR Dow Jones Industrial Average ETF (DIA)
  • iShares MSCI Australia Index Fund (EWA)

Disclosure: No Positions

Didi Global To Delist From New York Stock Exchange

The latest Chinese firm that plans to delist its ADRs from the New York Stock Exchange is the ride-hailing giant Didi Global (DIDI). According to The Wall Street Journal the firm plans to pursue a listing on the Hong Kong Stock Exchange. Didi’s delisting has come just a few months after listing on the NYSE on June 30th of this year at $14 per ADR. The shares have fallen 44% as of yesterday’s close. From the journal article:

In July, The Wall Street Journal reported that Didi was considering going private to placate Chinese authorities. The Journal also reported in October that China’s internet watchdog had suggested that Didi explore a listing in Hong Kong.

However, Didi’s Thursday statement suggested the company isn’t going to pursue a take-private deal that would buy out the shares held by public investors—a transaction that would require billions of dollars of financing given its market capitalization.

Instead, Didi said it would apply to delist its American depositary shares from the NYSE, while ensuring they would be convertible into shares that could be freely traded on another international stock exchange. It said it would arrange a shareholder meeting to vote on the move. Didi didn’t provide a reason for the planned New York delisting.

Source: Didi Global Plans to Delist From New York Stock Exchange, WSJ

If you are holder of Did ADRs you may be wondering what are your options now that the ADR is getting delisted. The following article I wrote a few years ago may provide some answers to those and other questions:

Disclosure: No Positions

Long-Term Returns of Gold, Stocks and US Treasuries

The long-term returns of gold, stocks and US Treasuries are shown in the table below. Just like other assets, gold also outperformed other assets in some periods while under-performing in others. Overall gold has increased from $40 per ounce at the end of 1970 to $1,887.60 at the end of 2020, for an compound annual return of more than 8% according to a report by The Perth Mint of Australia.

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SourceThe case for gold: A special report for institutionally managed superannuation funds, The Perth Mint

From an investment point of view, gold has low correlation to stocks as the above table shows. Hence investors can allocate a small portion of their portfolio assets to gold.

Related ETFs:

  • SPDR Gold Trust ETF (GLD)
  • SPDR S&P 500 ETF (SPY)
  • iShares TIPS Bond ETF (TIP)

Disclosure: No positions