In a press conference yesterday where the PSP launched their election manifesto, Leong Mun Wai and Tan Cheng Bock played down the effects of Donald Trump’s tariffs on the global market. Leong Mun Wai said that tariffs fear was “overblown”, while Tan Cheng Bock accused the PAP of fearmongering.
And looked what happened to Asian stock markets today.
Well, that aged well. Because it is a severe understatement to dismiss the dismantling of seven decades of economic order as mere “overblown.”
This coming General Election, Singaporeans will have to decide and vote for the type of government they want. And I will be blunt here – I don’t think Singaporeans should be gambling with our future. I will use a stock market analogy here to illustrate.
The Opposition are like high-risk meme stocks. Some are more high-risk than others. Lots of hype, and plenty of excitement. Many lofty promises of high returns – reduction of the GST, allowance for caregivers etc – even if the details are blurry. Numerous soundbites used: Step Up! Two Singapores! Poor Fiscal Marksmanship!
But their fundamentals are questionable. E.g. The Workers’ Party asking the government to borrow more money when interest rates are low (note: the interest rate shot up soon after, and we will be in a bad position if we had followed WP’s suggestion), or asking the government to build less BTOs in 2019 to prevent an oversupply of flats (note: housing prices would be far higher now if we had followed WP’s suggestion).
And when things go south and everything come crashing down, shareholders – i.e. voters in this case – are the ones who have to pay the price.
In contrast, the PAP resembles a dependable blue-chip stock, not unlike Berkshire Hathaway. It may not generate the same buzz like your hyped-up names, but it is built on solid fundamentals. And most importantly, it has a proven track record of delivering steady, long-term returns.
Don’t get me wrong. There is a place for an elected opposition in today’s context, and it is unthinkable and implausible for us to return to a period where we have zero elected opposition MPs in Parliament.
But while a savvy investor might include a small portion of high-risk stocks in their portfolio, they’d be careful to limit them to a smaller percentage. Having a higher allocation of such stocks can result in volatility, especially as we deal with the unpredictable geopolitical situation outside our shores.
The question is – can Singapore and Singaporeans afford that kind of volatility? And what should the right ‘balance’?
Food for thought.
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