American elections have been very amusing. A country of 323 million could find only two prime candidates: a crook, and the other, an unsophisticated albeit a successful businessman. While I would not vote, if I had got to chose between the two I would chose Trump. There is nothing positive about Hillary. I feel sick when I see her speaking—to the degree that Americans don’t feel the same is a sign of huge moral degradation that has already taken place in the US.
Also, I do agree with several issues that Trump talks about…
In my view the migration issue is real; very real. I am surprised that despite that he lives in his bubble, Trump seems to understand the problem. People of non-European origin tend to overwhelmingly vote for a bigger, nanny state, contributing hugely to the degradation of the West. And the migrants do not change their voting pattern for generations after they have moved to the West—in fact, I don’t think they ever change their minds. Culture is entrenched and it does not go away even when you have changed your country of origin. Moreover, culture becomes more entrenched once people start living in their own ghettos after migrating to the West.
Among those who see some issues with migration, most tend to see Islam as theonly problem. After 9/11, it has become politically acceptable to talk about problems inherent in Islam. Indeed, Islam is a problem and a huge problem (at least in Europe), but the real problem is much wider and deeper… America’s problem is mostly to do with African-Americans and Hispanics (for example, 80% of girls and women crossing illegally from Mexico get raped on the way). But Americans start to choke when one raises the problems to do with anyone else than Muslims, who are actually not even 1% of the American population.
In Canada, the real problem is to do with Indian Sikhs. In Surrey, they run gangs, rampant violence against women, drug trade, etc. Given that virtually all taxis in Vancouver are driven by Indians, the city afraid of Indian-style riots does not let Uber operate. To prove that we are in 2016, baby-Trudeau appointed several Sikhs among his ministers. The peer pressure that exists within Sikhs—as is the case with other (tribal) migrants from outside the West—means that they must do what their religious/tribal hierarchy asks them to. Indian Presidents and Prime Ministers who were Sikhs, while still in power had to kowtow to their community’s pressures, often quite openly. I guarantee that within a couple of years, cases of corruption and favoritism that these Sikh ministers bestow on their own community will start to come to light in Canada. (Linked here is more of my thoughts on migrants).
Political correctness is suicidal for the West. At the same time, most of the so-called emerging markets—whole of Africa, Middle East, South Asia, and most of South America—are sinking. India and Pakistan, both made-up of spineless institutions voted into power by ultra-irrational people, posture all the time over Kashmir, always hoping that the US would come to arbitrate if the situation got out of hand. But, someday, it will go out of hand, and snowball into something ugly. I am sure we will see emergence of >100 countries from what are today unnatural countries of Afghanistan, Pakistan, India, Bangladesh, Myanmar, and Sri Lanka.
The world is becoming very chaotic. My suggestion… Buy gold, and invest in China, South Korea, Japan, Singapore, HK, Australia and New Zealand; maybe, South Argentina and Chile.
As the US elections go through their climax, gold will be very volatile. The market thinks that gold will go up if Trump wins—don’t ask me why. But even if Hillary wins, gold wouldn’t be much lower than what it is today. To me, it seems that that at $1,277 per ounce gold, downside risk is minimal. The upside in gold can be nice. Even better, give a stink order for Central Fund of Canada (CEF.A)—in a bear environment, it trades at a nice discount to its NPV. I would look for a 6% discount to NPV, (suggested bid price: US$13.20 or C$17.63).
Here are thoughts on some companies:
→ Irving Resources (IRV; $0.44): IRV is by far my most favorite stock. It is run by Akiko Levinson, who drilled off one of the biggest gold projects in Canada, Springpole. This project was in Gold Canyon, a company that Ms Levinson ran. She made a huge amount of money for her shareholders when she sold Gold Canyon. I always prefer betting on people who have been successful in the past. She now runs Irving Resources (IRV), with projects in Malawi and Tanzania, and most importantly in Japan. It pays to remember that Ms Levinson is Japanese, knows how to operate in Japan, and is very, very well-connected there. Also, deeply involved in the company is Dr Quinton Hennigh, a very well-respected name in the junior mining industry, who also runs Novo Resources (NVO), about which I have wrote earlier. (Note that apart from the fine-print at the bottom of this letter: I have in the past worked with Ms Levinson and intend to in the future.)
→ KWG Properties (HK:1813; HK$4.44): This is a property development company, with properties in China. Not only it is trading significantly below its marked-to-market value, it also has dividend yield of >7%. Earlier I wrote about CSI Properties (HK:0497; HK$0.265), another company with a good dividend yield and low PB ratio based on marked-to-market valuation, a company that has recently taken a beating because of increase in stamp duty on property transactions in Hong Kong. Do invest in China, South Korea and Japan—do not keep all your eggs in the US, Canada and Europe.
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