International Punting on the Brexit

The UK is not going to come back to pre-EU days. In fact this is the continuation of the trend over a century that may well see the British Empire reduced to just England. Its last bastion of global power i.e London as a financial centre looks shaky.

The European project is failing thoroughly. Once there were the economic project and the cultural project. When the economic one got into trouble Europe clang to its cultural unity. Now it looks like this is in trouble too.

 

Businesses (banks to begin with) will relocate.
Banking giants consider moving thousands to EU as Brexit rocks City

Material and labour costs will go up. Existing projects would be in trouble. Property prices will come down.
HOUSING EXPERTS: Brexit would turn London's property market upside down

 

The bitter/sweet irony of it all. The sun has set on the empire.

After meddling in the world for centuries and breaking up countries at whim, great Britain itself is/will be reduced to just England and as Nigel Farage put it "without having to fight, without a single bullet being fired”.

If history is any guide partitions are almost always followed by further secessions.

Power struggles, recession, infighting, xenophobia, economic uncertainty, European retribution and disintegration, migrations (to and from) will be very interesting to watch over next few years.

 

Going to be much easier for AU passport holders to pick up residency visas in coming years

 

As an older English person living in Australia, I recall prior to the UK entering the "Common Market" visiting my parents in the UK and being able to buy Australian Lamb and beef at reasonable prices. Great quality meat and vegetables. Once UK was part of the EEC then Australia was unable to export, as France, etc were given subsidies for farming. This was what the UK had for sale, with the exception of some NZ lamb. I can't help but think that now there is surely an opening for Free Trade of our farm products to the UK.

 

Haha I should know better than to post after coming home from having a few drinks. I'm sorry if my comments were misleading - I'm obviously not suggesting people who voted for or support Brexit are all xenophobic. Just that the leave campaign was obviously drumming up fear, and levering off of all the xenophobia and fear of immigrants. When, in history, has that ever ended well?

There are valid reasons for wanting to stay, but they weren't the main ones used to present the argument. Hence I agree with Mr Nielson that it was an "emotional plea" mostly, and the economic arguments were far off the mark.

I hope England will be fine, and I suspect it will be. But here's my contrarian view - plenty of nations with glorious pasts you can make that argument for. You can look to the country which is the birthplace of democracy, citizenship, legal systems, Western civilisation in general... I'm sure Greece thought they could return to their "glory days" a few times in modern history.

 

@BingoMaster ha. snap. I like it

 

UK downgraded by Moodys already. This is a terrible result for the younger people of the UK who will lose so much opportunity. Ive lived in both UK and EU, freedom of movement and employment in 28 countries is a great thing, many Australians can't relate because they've never had this freedom. Fears of increased terrorism or uncontrolled immigration is just fear mongering rubbish but seems to have worked with some parts of the population.

 

Maybe the following is appropriate for this thread in helping to stay level-headed in events like these:

Get Ready For The Bull Market in Opinions

 

A version of this post originally appeared here in October 2014. It’s still very relevant for the current period of market volatility.

 

Still, a reminder doesn't hurt. Perhaps it needs posting here daily. Seems that many never learn and hence why history keeps repeating itself.

Personally I'm thrilled that many have short memories and never seem to learn. Think of all the magnificent opportunities to fast track ones wealth that we would be missing out on if people were rational and actually remembered the past!

 

Not business as usual because Brexit is unprecedented so no historical context exists, and it will not reside in vacuum:

• It will have cascading global implications both political and economic.
  
• It is but one symptom of world-wide protectionism back in favor

Britain's Brexit just killed globalisation as we know it

Harvard University economist Dani Rodrick on globalization:
Dani Rodrick dubs those trade-offs the "inescapable trilemma of the world economy." What that means is that we can have any two of these three things, but never all three: democracy, national sovereignty and global economic integration. In other words, you can't have people voting their own interests, in a country that always places its own interests above the shared interests of the global community, while also stitching everyone's economies together seamlessly.

Surprised that Shorten is not pushing for protectionism or tearing up trade agreements, clearly when politically it is working on a global scale. Nick Xenophon is successfully deploying it.

 

Perhaps, but is it the start of another Great Depression? And even then if one invested sensibly with appropriate risk management in place such as cash buffers etc it wasn't the end of the world. And importantly don't let personal debt get out of control. I shudder when I see how much debt some property investors take on at times. Margin lending another dangerous situation if not used conservatively.

There has been no shortage of seemingly insurmountable challenges with markets over a very long period. All one can do is plan for the future as best you can and should things get tough then live within your means. No use panicking or worrying yourself to death over it. One way or another life goes on.

Remember that popular old British TV comedy Dad's Army. As Lance Corporal Jones used to say: Don't Panic, DON'T PANIC!

Gees, showing my age now.

Not advice.

 

Maybe maybe not. No one knows the answer to that and that is a big problem in itself. The problem is two dimensional political and economic with no historical guard rails. Why would:

• Draghi and Karney feel the need to calm the markets ?
• Moody's lower UK's credit rating outlook ?
• Remaining European leaders get into a huddle and start political posturing ?
• Pound drop to lowest value since 1985 ?
• .......

I can go on, but the point is Brexit is justifiably up there amongst the top reasons to panic (financially) especially if you are in UK. The first loss is the best loss. Those who are not panicking will wear the maximum losses.

• How would you price/manage the risk when you cannot assess it ?
  
• The unknown unknowns outnumber the known unknowns.
• The risk management itself in this case (2 trillion off markets) can trigger a lot of dominoes

 

Damn, I don't know how I sleep at night.

I'm not smart enough to add more. So heading out to the deck to have some home brew. Seems like something similar might be a good idea for a few others here. Come to think of it if times get tough home brewing could be a great way to cut household expenditure. See I'm already planning in advance.

 

@austing I liked the line in the article you posted "interesting doesn't mean actionable." My comments here are all related to my interest in what's happening in the world, nothing to do with investing. My investment strategy won't be changing at all

In fact if things plummet it will be a good time to test my resolve / crash test my strategy haha

 

But the title of the Thread is: "Punting on the Brexit". So I assumed any comments related to investing / trading. No matter I only briefly skimmed through posts so probably missed a lot. All very entertaining and happy to see someone other than me getting a bit excitable.

 

A lot of people will go through their entire life not being able to do things simply and sadly because they just can't afford too..
And when i started most people laughed when one told them what i invested in,800% Compounding 25 years later 3 blow-up and a few more to come and the portfolio
is still blue chip rock solid,plus this time like 8 years ago i never got it 100% right maybe looking back maybe within 3%,and the safe is not be open just yet..

 

Not sure I fully understand. But the majority of my mistakes have been selling ones. Most stocks sold eventually came good again or were taken over with what would have been a pleasing result if I had hung on. Diversify widely enough and avoid having too much in a single holding then any blow-up is unlikely to have a major impact on ones portfolio.

Of course when the share market crashes everything is affected especially capital value. Which is why I focus on dividends. Of course they can be reduced / cut also. But to the best of my knowledge in the vast majority of market calamities dividends have been noticeably less volatile than capital and tend to recover quicker. A cash buffer to smooth dividends is always maintained to further reduce risk in our case.

One could completely go all cash and / or try to move in and out of the market to preserve capital each time there is panic. Then of course there's shorting and the like. Good luck with that. Some will get it right, many won't.

Or one could put their faith in productive enterprise. No matter what happens companies will still be needed to provide goods and services. This is what I have faith in and what governs my investing approach. Business cycles, crashes, depressions / recessions, black swan events and the like come and go. Somehow we seem to muddle through it all and not only survive but prosper once again.

But as I have said, I'm nothing more than an ameteur investor. Others smarter may no doubt choose to do things differently.

 

You must have had some good transfer skills to get too the investment level that you are now managing nothing happens like that within a small span..