August 05, 2021

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Blue Sweep in US, Riot In Capitol

Dear all, Democrats have pulled a stunning upset by winning both Georgia race. This will flip senate control back to Democrats since 2014's loss. This would also be the first time since 2009 where Democrats control the White House, Senate and Congress. What this means - a strong Biden Presidency. Democrats would have the opportunity to rollback policy damages caused by Trump administration and rectify the wrongs domestically or foreign. 
 
Pic from Business Insider
 
Market is currently mixed with tech leading the plunge due to the potential anti-trust movement by the left wing of Democrats. However, other stocks are doing rather well as they expect a larger stronger stimulus which is broad based and favouring small businesses. I think if Republicans were still in control of the Senate, it would be a frustrating Presidency for Biden. Although some are worried that a Democrat is bad for business, economy and corporate due to higher taxes / wealth tax etc, on the contrary, I think Democrats in the course of their history, they have always managed to salvage the economy and bring the nation out of troubling times such as Franklin. D. Roosevelt during the Great Depression with the New Deal and World War 2, Barrack Obama during the Great Recession and I believe Joe Biden may do well navigating the Great Pandemic. At the very least, he would do better than Donald Trump. 
 
Many said, the stock market would collapse if Donald Trump loses. It has proven to be untrue. Probably the typical fear mongering rhetoric by the GOP and right wing extremist. Similarly this time, a Blue Sweep by Democrats is not an apocalypse. 4 years of damage control requires a strong mandate. I believe this is exactly what US needs at this juncture. This is to restore public confidence in US domestically and globally.  
 
 
With regards to KLCI, the selloff is not likely due to US but rather the increasingly serious Covid-19 cases as it would appear the infection has spread into the community with the healthcare system at the brink of capacity. Additionally, locally the politics are not stable again with the potential implosion in PN as we move towards 1 year anniversary of the infamous "Sheraton Move" 
 
My view - any selloff off in good blue chip fundamentals stocks is not a bad thing. Do not be  overly pessimistic as the market is presenting a great opportunity for investors with sectors such as Banking, Insurance, Utilities starting to look attractive again. In addition, glove stocks have came to life with the increasing worry on the pandemic front. While it is too early to tell if the rally of glove would be sustained, as a strong fundamentalist, I have always believe in the quality of stocks lie in the fundamental value. A stock cannot be trading below its true value perpetually regardless of the noises. I think our earlier patience is paying off and I will be a little bit more patient before looking to collect these good blue chip stocks for 2021's play.
 
Food for thought: 
 


 
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This  information should not and cannot be construed as or relied on and (for  all intents and purposes) does not constitute financial, investment or  any other form of advice. Any investment involves the taking of  substantial risks, including (but not limited to) complete loss of  capital. Every investor has different strategies, risk tolerances and  time frames. You are advised to perform your own independent checks,  research or study; and you should contact a licensed professional before  making any investment decisions.

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