Latest Fund Price: $1.539 (-1.1%)
Market Value: $1,434,211.41
No. of Units: 931,900.9058
*warning: It will be a bit long and you might not like my view, feel free to skip it if you have zero interest.
Dear Investors,
I ain't a person like politics particularly, however unless you are residency in China where all information are sealed or living in a cave with no internet in the last month, the occupy central is the hottest topics in Hong Kong. So I would like to express my takes on this singular event from both economic and political views.
Economic View:
I knew it is coming, sometimes between Sept and Oct, and my prediction of this event was: it will only have minor effect to HK's economy, and i am pretty much correct (for now), historically politics impact on the market is only temporary, after the incident ends, the market will continues her previous trend (up or down)
Even as huge as the war between Russia and Ukraine, it only make Russian stock drop 20%, and when the new president of India stepped up, the India stock market surge 30%. It is due to the market is driven by news in short term, but driven by economic performance in long term. If that political event have no fundamental change to economy, then the society will quickly forget about it.
When occupy central started, the HK stock market dropped roughly 5% in 3 days, it added up to the previous drop so this month HS index have dropped roughly 8% in total, while my fund have only dropped 1.1%, as you can see i was prepared for it. Regardless of the market downside, my fund performance was still up 0.6% before the occupy central started, but in 2 days before the end of Sept, it was gone negative.
Although i said political events doesn't affect the economy that much in long term, and i believe after it is settled everything will be back to normal, however we can use the market's short term respond as an indicator to observe whether the world see these political events will have a positive effect on the society, the mechanism behind is simple, if the political event have given the investors confident, surely more capital will enter and cause the market to rise, if the political event show a negative effect on the society, then the investors will sell base on fear and cause the market to drop.
At this point, we can say the world doesn't think occupy central will have a positive impact to HK. The supporters of this event argue, they know in short term they are affecting the economy, however comparing the political improvement they are going to bring, the sacrifice will worth it, so lets discuss this claim in my political view session.
Political View:
For every political events, the society have to pay a price, the organizers knows it (maybe the students don't), so in order to convince people to join, they will say the long term benefits will make the short term sacrifice worthy.
If you have no idea what they are fighting for, let me simplify for you. HK is going to have a "democratic" Chief Executive election in 2017, the election of the previous CEs were chosen by a small group of people, but now Beijing agreed all of the registered voters in HK can vote for our own CE, sounds great right? wait until you realize the CEs we can vote for are pre-selected by a small group of committee. So democratic movements see this as a fake democratic election, rather than a real democratic election, a universal suffrage where citizen can nominate anyone to be the CE of HK,
In order to express their anger of the Beijing decision, few organizers included 2 students organization suggest we should occupy central (the economic hub of HK), by paralyzing the society and economy of HK, it will force the HK government and Beijing to rethink the decision and ultimately give us a true democratic election in 2017. That was the plan!
But after couple months of back and forth, it turned out not much citizen are interested to get involved, occupying central become unsuccessful, instead they have ended up occupied 3 other locations: Admiralty, Causeway Bay and Mongkok, However how the government action handling the situation next is what make the "shit hit the fan", the police hope to use tear gas to clear the streets, instead of succeeding taking back control, it raged up more citizen came out to protest on the street.
So we can say the misused of tear gas is one of the reason why there are so many people to join the movement, and later it developed into a "no man drive" events, because most of the citizen came out to street, blocking the roads NOT because the organizer asked them to, they are spontaneous movements, and due to the fact that many people use umbrella to fight against the police's pepper spray, the world now called it the "umbrella revolution".
If you want to follow the latest update, you will find it everywhere on the internet, the movement is shown on CNN, BBC even the cover of Times magazine, so if the movement is about rising voice how the people of HK do not like the government, they have already succeed more than they can imagine. Yet at the same time, they have affected many people's livelihood, e.g. public transport, retail stores have to shut down, and many business depending on the national holiday on the 1st of Oct, Now it is my take (some might not like it)
From the beginning, i personally do not feel by paralyzing the society can bring any positive effects onto the society, and historically i have not seen one case this kind of protest will lead to a successful result as getting what they want, it doesn't matter whether it is an absolute monarchy country, or the most democratic country, it just won't work!
Instead it will lead to a chaos, the authority will end up clearing the street, because as a movement develop, more people will make things complicated, and without a clear leader controlling the followers, different opinions will split the movements apart and lead to a bloodshed internally, this is the nature of men, everyone want to be the one who take control.
However i also believe HK can afford it (if it doesn't last too long), because our economy is still strong, but personally by occupying the streets and hope it will change the mind of Beijing is a native thinking, if you really understand communist, they ain't even afraid of USA, how would she can be affected by HK? let alone using a method that is hurting ourselves.
To me, i value economic freedom higher than political freedom, because when the society asking for more political freedom, the reason behind is when the majority of the citizen cannot share the benefits of the economy achievements, i would be pretty confident to guess 90% on the street now is not because of democracy, but because they cannot afford a house, the inflation is too high, the government is not function properly, only 10% is there for the real deal, a true election.
Their logic is that: if we have more political power, we will able to choose someone, a true leader we desire to save us from the mess, this is the logic i personally think it is flawed and it will never ever a government can achieve such thing. This is similar to a young lady always dream of her prince charming, and when the real husband material came along, she doesn't like it very much, that's why in the countries where democracy have become mature, the citizen have experienced many chosen (imperfect) president, their request will become more realistic.
However I must admit if the common citizen have certain power over the government, they might feel better, but the belief that a "great government" will be able to save us all from the problem we have now is a delusion.
For sure there are also many actually angered with the fact that Beijing do not keep their promise by giving us a universal suffrage, i never trusted the communist right from the start, as the bible said: "Can an Ethiopian change his skin or a leopard its spots? Neither can you do good who are accustomed to doing evil." - Jeremiah 13:23
Let alone recently the President of China Xi Jinping openly speak: "China is a lion, but we are a civilized lion." i was like, seriously? i like lion, i think it is cool and tough and all that, but i also bet the most civilized lion still want to eat some sheep, in a civilized way of course.
Hereby I called upon you who have patient to read this far, do not put hopes or waste your time onto these movements nor the government, i treasure the opportunity i am still having now, and did the best i can in my position so ultimately, my financial freedom will allow me to get away from these political bullshits.
regards,
Calvin
