Some have described him as mercurial. Others say he is enigmatic. There are even some who claim that he is a genius. It depends on which side of the political divide we belong.
But putting a label on Donald Trump is about as pointless as trying to write on a pane of glass with a pencil…. only worse.
Thing is, business leaders and country leaders have their own objectives. Their job is to achieve the best possible outcomes for their companies and their economies. If that means biting their tongues when it is necessary, or avoiding confrontation when it is prudent, or heaping undeserved flattery onto someone, then they will do what it takes.
At the end of the day, results are all that matter. That is how companies and countries will be judged. Profit matters. Cash flow matters. Economic growth matters. If that means pandering to the world’s most powerful leader, then so be it. Who cares if tugging forelocks and doffing caps can shave a few percentage points from America’s crazy tariffs?
We all know who is paying the tariffs. It is not the companies that export to the US. It’s not even the US importers. Instead, it is American consumers and American households that are footing the bill.
If they aren’t already paying the full tariffs, then they will almost certainly be paying for it later on. The US administration is already frantically back-tracking on tariffs because food-price inflation is climbing.
The Trump administration can try to deceive the American people as much as it wants. But as Abraham Lincoln said: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.”
Inevitably, there will be a core of US voters who will staunchly defend the Trumpian slogan to make America great again. Who doesn’t want to make their home country great?
But our objectives as investors is different. It is to make our portfolios as resilient as possible to withstand America’s bizarre antics.
Watching Trump’s stunts is like watching a man drink soup from a bowl with a fork. Behaviour like that is neither mercurial nor enigmatic. It is a dreadful waste of our time, which is why we should instead monitor how our investments are performing – not because of what America is doing but despite what the US is doing.
We are living in a world where lies have replaced the truth, where fear has resulted in extreme volatility, and where misinformation and disinformation are considered normal.
But cash doesn’t lie. So, focus on cash flow. Focus on the income generated by our investments. It is a much better guide to how we are doing. It is a much better use of our time.
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Disclosure: David Kuo does not own any of the shares mentioned.
