“Whenever you find yourself on the side of the majority, it is time to pause and reflect.”

- Mark Twain

“If you can't explain it to a six year old, you don't understand it yourself.” 

- Albert Einstein

“Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.” 

- Mark Twain

A. The Next Four Years

Joe Biden has won the highest popular vote in the history of the US.

At the time of writing, more than 77 million people have voted for him. He has beaten the record set by Barack Obama who was swept to power on that famous wave of ‘HOPE’ and 69.5 million votes in 2008.

But here’s the thing….so has Donald Trump.

Trump might be trailing Biden in the popular vote of 2020, but he, too, has beaten Obama’s 2008 record.

Trump, at the time of writing, has 72 million votes. So he has won the second-highest popular vote in the history of the American republic.

That is remarkable. Far more remarkable than Biden’s very impressive count.

In fact, even more interesting is where his support grew: Women and Minorities.

His support among White Men shrunk.

How could this be?

Will the Republican Party try to position itself as the party of the working class & minorities in the next four years?

I found this article eye opening on why those 72 million might have voted for Trump.

A section from the piece:

That is what makes the vote for Trump so striking, and so important. Because what it speaks to is the existence of vast numbers of people who are outside of the purview of the cultural elites. People who have developed some kind of immunity to the cultural supremacy of the ‘woke’ worldview so intensely mainstreamed by the political and media sets in recent years. People who are more than content to defy the diktats of the supposedly right-thinking elites and cast their ballots in a way that they think best tallies with their political, social and class interests. People who, no doubt to varying degrees, are at least sceptical towards the narratives of identitarianism, racial doom-mongering, climate-change hysteria and all the pronouns nonsense that have become dominant among political and cultural influencers, and which are essentially the new ideology of the ruling class.

Trump has lost. But so has the anti-Trump establishment. In some ways, the establishment’s loss is far more significant. These elites see in the 70 million people who disobediently, flagrantly voted for ‘evil’, and who question the doom and divisiveness and censure of the new elites, a genuine mass threat to their right to rule and their self-serving ideologies. And they are right to. For these unconquerables, these teeming millions who have not been captured by the new orthodoxies, are proof that populism will survive Trump’s fall and that the self-protecting narratives of the new elites are not accepted by huge numbers of ordinary people.

This is the real resistance. Not the upper-middle-class TikTok revolutionaries and antifa fantasists whose every view – on trans issues, Black Lives Matter, the wickedness of Trump – corresponds precisely with the outlook of Google and Nike and the New York Times. No, the resistance is these working people. These defiant Hispanics. Those black men who did what black men are not supposed to do. Those non-college whites who think college ideologies are crazy. These people are the ones who have the balls and the independence of mind to force a serious rethink and realignment of the political sphere in the 21st-century West. More power to them.

These 72 million won’t go away. In fact it makes the American Civil War more likely.

We have discussed both the Coming American Civil War and the Fourth Turning before.

Let’s narrow down to the micro for a second.

What will the Biden Presidency look like?

There are so many points of view out there, and I must have read over 40.

The one I found most useful was Ian Bremmer’s at the Eurasia Group:

Here is a summary of his views (as of earlier this week, all emphasis is mine):

This election result is the most challenging governance scenario for a Biden presidency, who could well enter office as the weakest president since Jimmy Carter in 1976. Presuming the Senate stays Republican (again, not a given but likely), President Biden will have won a nationwide contest by 5 million votes but won’t be able to push through any meaningful political reform.

It’s a political environment like none other globally, and reflects the extremely unusual nature of the american political system—the uniqueness of the electoral college, the extreme partisanship of the two political parties, and the effects of decades of redistricting and voter suppression.

Cabinet appointments have to be confirmed by the (Republican) senate, which means some positions (department of labor, for example) may stand with acting posts, state/treasury and other key positions will go to centrists. Biden’s broader social democratic policy agenda, attempting to align centrist Democrats with the more progressive wing of the party, is effectively stillborn—no nationwide increase of the minimum wage, no healthcare redo, no dramatic legislative agenda on sustainability, and no tax increases to pay for increased outlays (while Republicans in congress immediately shift to concerns about the deficit and fiscal responsibility).

Most importantly, in the middle of a pandemic, the ability of Biden to pass what would’ve been a $3 trillion stimulus has now evaporated—with prospective infrastructure, state and municipal outlays being chopped. A limited stimulus focusing on business support and extended unemployment benefits is now feasible in the lame duck session, though it’s likely to be hard fought and small, in part because overlap in spending agenda remains limited, in part because Democrats will hold out hope that they can swing the senate.

All of which creates an interesting dynamic. Overall, Biden’s orientation on domestic policy is radically different from that of President Trump, but he’s likely to be far more constrained in implementing it. While the Biden administration will be less constrained in their foreign policy... but there the agendas and orientations are actually more aligned with those of the Trump administration.

On domestic policy, it’s going to be rule by executive order (also reined in by a more conservative judiciary, at every level)... with Biden as quick to undo Trump orders as Trump was in undoing Obama’s. That will mean a significant reassertion of the administrative state and heavier regulatory oversight in every area of the us economy, most particularly around environment and big industry.

What do you think Biden’s next four years will be remembered for?

Last week, I interviewed Marko Papic, Chief Strategist at The Clocktower Group about geopolitics and what to expect next.

Highly recommend a listen, because he will give you a useful lens with which to see the world and we covered some controversial ideas on what we may expect during Trump’s lame duck period.

I also covered his book a few weeks back.

B. Changing Narratives

The narrative driving the market since March has been clear.

"What's bad for the economy (politics, lack of stimulus, unrest) is good for markets. It simply increases the propensity for lower rates for longer and in bigger size.

I summarised it a few months back as something I told a friend: “Bad news is good news, and good news is also good news”

But, this narrative might be slowly shifting with the elections and a potential vaccine.

Maybe now in reverse, what is good for the REAL economy is bad for markets.. why?

Better than expected recovery….vaccine, etc. will unhinge rates from lower for longer, significantly increase discount rate. The FED could be looking at hiking rates in 2021.

We will find out soon enough.

I recently read a book that Warren Buffett recommended called Bull! by Maggie Mahar.

It’s a financial history of the 1982-2004 cycle. It is a fascinating look back to see how so many things came together to create that astounding bull market.

The NASDAQ compounded at 19.5% for 20 years! That’s over a 30x in 20 years. What a time to be alive.

That bull market then led to sixteen fallow years when the NASDAQ did exactly 0%.

I found it helpful to be reminded of what sentiment really looks like in a bull market and the importance of understanding and timing the big cycles.

Where are we in the cycle in your opinion?

I believe we are far from the end of this bull market.

C. A Few Things Worth Checking Out:

1. If you want to go deeper down the rabbit hole of Populism, I learnt a lot on the Brendan O’Neill podcast with Sohrab Ahmari (op-ed editor at the NY Post). The NY Post had broken the Hunter Biden laptop story. They discuss Big Tech’s alarming suppression of journalism, the woke left’s abandonment of the working class, and why we must oppose the New Normal.

2. In 2010 Matt Taibb wrote the now famous Rolling Stones story on Goldman Sachs, the opening paragraph:

The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

That article was the start of a sea change in the media’s perception of the firm.

He’s got a nose for a good story and he was on the Hidden Forces podcast talking about the Election and its aftermath. This is again a discussion about the big tech platforms and how they may stifle free speech and what we need to do about them.

3. This is cool!

The Masters @TheMasters

From pond to pin! Rahm skips to a hole-in-one on No. 16 at #themasters

November 10th 2020

55,555 Retweets248,792 Likes

4. Whenever you feel like buying Value Stocks, watch this ;-)

“Everyone wants freedom. We want to be physically free and mentally free. We want to be financially free and we want more free time. But where does that freedom come from? How do we get it?

The answer is the opposite of freedom. The answer is discipline. You want more free time? Follow a more disciplined time-management system. You want financial freedom? Implement long-term financial discipline in your life. Do you want to be physically free to move how you want, and to be free from many health issues caused by poor lifestyle choices? Then you have to have the discipline to eat healthy food and consistently work out.

We all want freedom. Discipline is the only way to get it.”

- Jocko Willink