What will happen to the Philippine Stock Market When BBM Goes to Power?

You might be asking this question now that the end to the Philippine election is near. And my answer to that is, the stock market will do what it has been doing since the beginning of time. BBM might affect the economy and the Philippines might go into the garbage. Or it may become one of the most prosperous nation in the world. We don’t know. But what I do know is that, every good business, will always do one thing… Keep making money. And that’s what we investors should look out for.

For as long as there are great businesses, it will thrive no matter what the country is. You can go the the shittiest country in the world and you will see a great business dominating and you would be envious to have a company like that as an investment. Even in a country with record high inflation of 30%+ like Turkey will still have great businesses to own. And sometimes, that’s enough.

In the following years in this new administration, we may encounter some ups and downs. And that is ok. We investors should not participate on the politics. Nor blame the politicians for the drop in the economy. If you believe that politicians are inept at managing a country, you shouldn’t be surprised if the economy tanks. Its great to have low expectations. If you know that there are possibilities of things going bad, you open your eyes to the things that you can do if it indeed happen.

Imagine what you’ll do if the stock market drops 50%. Of course, we all know that’ll be a blessing. But in the moment when that happens, you might be cursing the new president. You might be so angry that you forgot to buy yourself stocks on the cheap. To invest, you have to keep in mind that there are players who affect things. Politicians are one of the players. But we are players too. But we play a different game from them. If we get affected by their decisions emotionally, we lose. We should see the world in a detached manner. Kind of like looking at things in the 3rd person perspective. Being open to the things that will happen good or bad, gives us the insight to prepare and the courage to take action when that happens. And of course, Mr. Market’s whims. When something is crashing, something is going up. Every kind of scenario gives opportunity. So its useless to feel angry at bad news.

As a few examples, when the stock market drops during the start of invasion of Ukraine, what moved up? Oil, energy, coal. When the Chernobyl nuclear power plant exploded and started the decline of the Soviet Union, what went up? Potatoes. When COVID started and devastated all businesses, what went up? Internet. For record high inflation? Commodities

If you are calm, you will be able to think. As every bad news is an opportunity. And history, if you’re paying attention is a great teacher.

“Chaos is a ladder.”

Petyr Baelish, Game of Thrones

Amor fati

Love whatever fate brings you. And the only way to love fate as an investor is if you’re prepared to every possible scenario that will happen. Of course we can not be prepared at EVERY possible scenario. But thinking about it makes us more prepared.

Imagine now what you will do if the stock market went up to 50%. Will you be happy? What will you do? How is it different with the market down 50%? Are you going to thank the president if that happen and curse him if its the opposite?

Would you attribute your wealth to the president if that happen? I doubt you will thank the president if the stock market went up 50%. Most of us will attribute our good investments with our own abilities. So why do we blame other people if we fail? And tap ourself in the back if we succeed?

Part of being an investor is seeing clearly. Knowing how to attribute things to luck, or bad luck, to skills or incompetence, stupidity or wisdom. And I think for me, blaming everything to the government good or bad, is not of wisdom but its opposite. I think its much more wiser to prepare. To believe in your own abilities and to invest by your own skills.

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