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How the USA election result will impact the BUST in the B-B-B cycle

Written on the 8 November 2016 by James Cagney

The USA election campaign is over. Frankly I found it nauseating - rhetoric, accusations and so called expert opinions. The mud slinging employed by politicians today is unbearable and should cease - then perhaps we may just take politicians more seriously. The election of Donald Trump has stunned the world and few predicted this outcome. However, it is nothing but a temporary blimp to the inevitable BUST in BOOM-BUBBLE-BUST Cycle. Just as BREXIT was in Europe - a temporary reprieve from the inevitable BUST in Europe.

If  Hilary Clinton had won it would have accelerated the momentum towards the BUST in the biggest economy in the world and the rest of the world will follow shortly thereafter. At least Donald Trump has given the USA population more hope for economic prosperity again. His slogan "Make America great again" was brilliant a strategy. It stirred up the fire of patriotism for many Americans who are seeing their personal financial situation decline over the past decade. With Hillary's stable "Same old, same old" old strategy the BUST that so many economists have been predicting would have hit the western world like a perfect storm. What Trump's election win has done for us is to give us more time to get our finances in order before the BUST.

Blogger Charles Hugh Smith breaks down the central institutions in the USA which would have continued under Hillary Clinton :

Health care "doomed to bankrupt the nation." Defense "a failed system of cartels and Pentagon fiefdoms." Foreign policy one "disaster" after another. Governance "a corrupt system of self-serving elites, lobbyists, pay-to-play, corporate puppet-masters, and sociopaths who see themselves as 'above the law'." Smith went on to say that these "last failed remnants of the state-cartel hierarchies, left over from World War II, must implode before we can move forward".

Will this change now that Donal Trump has won the election? Not likely - even though the Republicans now control both houses in parliament Trump did not have the support of conservative Republicans who blatantly renounced his campaign for the presidency. Trump has a massive task as a moderate republican, an unknown entity, who will want to spend vast amounts on infrastructure to improve the economy and ease the plight of unemployed Americans. Unlike Clinton, Trump is not a seasoned politician who knows his way around the corridors of Washington. He will butt heads with the 'establishment' as surely as the sun will rise tomorrow.

It is no secret that Trump is a maverick who isaccustomed to 'getting what he wants'. His condescending tone in his victory speech about Hillary and the democrats was weak and almost admitting that some of his outrageous promises, made to the public, may be only a pipe dream. Think about it: - 

  • Building a real wall between Mexico and the USA - especially after the Berlin wall came down 27 years ago?
  • Scrapping Trans-Pacific Partnership (TPP) trade agreement?
  • Admiring Putin as a world leader?
  • Antagonizing the Hispanic community calling hispanic illegals murderers?
  • Threatening to imprison Hillary Clinton?
  • Imagine Putin and Trump locking horns like rutting moose, eventually falling to the ground unable to move and dying of hunger and thirst. Nobody wins and everybody loses!

I have read many of Donald Trumps books and I admire his tenacity and business acumen. However how he will perform as a politician in a very fragile political world today remains to be seen. Just be thankful we have more time to get our houses in order before the inevitable BUST which could now be well into 2018 rather than mid 2017. 

I read a number of financial publications about the stock market, the money market, the precious metals and commodities and I have come to the conclusion that I do not have the time to listen to all the conflicting opinions. The predictions of unprecedented returns in numerous investments prior and 'post USA election' abound and who knows what the best investments will be! Too many expert opinions! I realize that many investors will make short term gains as the market slumped prior to and the gains post Trump's victory. Well I guess I have missed out on that small window of opportunity and I am just going to have to miss out on possible future gains because I have worked hard for my money and I am not about to gamble it away with just a promise of making a quick profit.

Over the years I have read a great deal about Warren Buffet, the CEO of Berkshire Hathaway Inc., an American multinational conglomerate holding company headquartered in Omaha, Nebraska, USA. This company has revenue in excess of USD.210 billion and Warren Buffet owns 37.4% of the company. If you are interested in buying Berkshire Hathaway "Class A' shares (on the 9 Nov., 2016 @ 4:50-5 pm GMT) they cost USD.227,134.98 per share. Yes, 227,134.98 USD each - and that's what an investor pays for a single share of Berkshire Hathaway. Therefore you would have to conclude that Warren Buffet is a very successful business man and investor and what he has to say is well worth listening to.This is what Warren Buffet said about speculating to make quick profits "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."

It has been said that Warren Buffet is not a stock market speculator. He studies the balance sheets and the management structure of companies and chooses to buy shares in companies based on their medium to long term profit potential. Warren also said that you should  "Choose a company that any fool can run - because one day one will". 

Mr Buffet spoke about the company Gillette for example and said that it was a good investment because billions of men go to bed every night and hair grows on their faces and they have to shave in the morning. What a sustainable and long term investment. That's why Warren states that  "To invest successfully over a lifetime does not require a stratospheric IQ, usual business insights, or inside information. What is needed is a sound framework for making decisions and the ability to keep emotions from corroding that framework".

Thank God we do not need a "Stratospheric IQ" - we all have a chance to be successful investors as well.  Investing for profit is just common sense. However common sense is not that common amongst investors because the nature of the beast is to make as much money as quickly as you can and what the stock market and money market can do for you - if you have the time and energy to do so. Most successful investors in the stock and money market spend endless hours every day buying and selling to be able to make money. Most have a "high risk capacity or nature"  and they make and lose money on numerous transactions during their daily trading. I no desire to invest that way and I and utilized the platform of residential property and just like every night when I sleep soundly my beard grows, so my properties grow in value. The "framework" I work on for residential investment property is:

  • Long term growth
  • Good rental yields
  • Vacancy rates
  • Steady and managed population growth rate
  • Building approvals
  • Stable government
  • Educated society
  • Location
  • Infrastructure plans
  • Generation trends
  • Labour laws
  • Research on local, national and global trends.

This above list is not exhaustive but it is good start. I am astounded by the fact that investors ignore the above and buy on emotion and do not ask for any research. That is why James Cagney and his team visit people in the comfort of their home around Australia and discuss a feasable framework for decision making. This is a FREE consultation with no obligation on your part. However, if what we say does makes sense to you then become a client.  Call James on 0416 137 645 or click >>> HERE to make an appointment

James believes in the "Client for Life" program and many of his clients have bought multiple properties from him over the years. If you want to read testimonials from these satisfied clients please click >>> PROOF. James Cagney is a long standing member of PIPA (Property Investment Professionals of Australia) and abides by their strict Code of Ethics. James is an advocate of additional professional standards within the industry. He has written an article on the games real estate agents play to extort advertising and co-coerce vendors and purchasers into signing contracts. James believes that the industry must clean up its act and this information needs to be made public knowledge. However the media do not want to do this because they do not want to upset some real estate agents, builders and developers whose advertising money keeps their newspapers afloat. To read about these tricks and tactics click >>> SMARTER

The 2016 Property Investment Professionals of Australia (PIPA) Investor Sentiment Survey found that the vast majority of investors believe the provision of property investment advice should be underpinned by relevant legislation. Although investors are becoming more sophisticated with 31 per cent of survey respondents having a set strategy for investing 87% consider that more investment education about the risks and potential benefits of investing in property is needed.

The survey found even higher numbers, at 89%, believe that the property investment industry should be regulated and licensed in the same way as are many other industries. Even higher numbers believe that property advisers should have some formal vocational training, and that the property investment industry should be regulated and licensed in the same manner as applicable to financial planners and mortgage brokers.

PIPA chairman Ben Kingsley says "Unlike financial planning and mortgage broking, the provision of property investment advice still remains unregulated. PIPA is committed to raising the professional standards of this industry and will continue to lobby the government to regulate property investment advice and educate investors to help them make informed investment decisions."

The good news is that the NSW Government's recent focus on raising training standards and increasing transparency and accountability for the property industry is a giant step forward for the Real Estate profession. REINSW President John Cunningham said "We have been lobbying the government on reforms for the industry in particular around education and training for many years." For too long people have been able to enter the profession with a minimum level of education - totally inadequate for the important role real estate professionals play in people's lives.  "We will be making a submission in of support on all of the reforms and look forward to the reforms coming into effect in 2017".

Once the NSW government has legislated these standard we trust the other states and territories follow suit to raise professional standards and particularly for those real estate agents who provide investment property advice.  Real estate agents will sell you properties they have listed on their books and these properties may well be suitable for you to live in. However, most real estate agents are not really interested in your profit making potential on the property. James concurres with the aims of PIPA and Real Estate Agents who sell investment property  that we should be licensed and thereby more accountable for what we say - just as financial planners and mortgage brokers.  If you want to learn more about the "sound framework" for profitable property investment contact James Cagney on 0416 137 645 or click >>> HERE.

In my emails over the past 10 weeks I have covered the Demographic and Spending Trends - which, in my opinion, is more reliable than other predictions in the market today. If you want to thrive and survive the coming BUST in the BOOM-BUBBLE-BUST cycle I urge you to read the series starting from the first article "Inflation the friend of the rich and the foe of the poor" click >>> INFLATION. Then go back to the email that took you to this article and systematically read through all of these articles.

I am about to consolidate these articles into an eBook which will retail for about AUD.$.10.00 (incl.GST). The eBook is being edited at present so take advantage of the FREE downloads. In the next few weeks I will be providing my well researched predictions for the best investment areas around Australia. Put your money into long term, solid investments and leave the speculating to those who are risk takers and who will lose money during the BUST period which will come. 

DISCLAIMER

This is not financial advice. You should not act solely on the basis of the material contained in this Property Update for your investment strategies. Changes in government and legislation occur frequently and without prior notice and financial markets are unpredictable.
Please note that the information herein is of a general nature only and is not intended as specific advice for any particular person or entity.

This information was written and compiled by James Cagney.  The opinions expressed herein do not necessarily represent the views and opinions of his associates including
Asset Finance Pty Ltd.


Author: James Cagney
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