My Take

Why I remain hopeful despite talk of doom and gloom

Like Wilkins Micawber, and having lived through Hong Kong’s many ups and downs, I believe that ultimately ‘something will turn up’

PUBLISHED : Wednesday, 11 May, 2016, 10:10pm
UPDATED : Wednesday, 11 May, 2016, 10:12pm

Nowadays I buy mostly ETFs and index funds, hold them and not think about it. The simple reason is that I am clueless about stock research and picking individual shares.

As a newsman, I also find following the money flow of regional ETFs provides a quick and easy way to gauge how outsiders view particular regions and places. After all, they are putting their money where their mouth is.

Take the iShares MSCI Hong Kong ETF. It’s the largest of its kind listed in the US. According to Bloomberg, investors have been pulling money out in the past 11 months regardless of whether the local stock market rises or falls.

Locals who are gloomy about their future are in good company. Foreign investors see little to be hopeful or cheerful about the city.

Analysts cite an itinerary of bad news that has dominated the headlines.

The economy is expected to expand at its slowest rate in four years. Retail sales in the first quarter plunged 12.5 per cent thanks to our policy of turning away mainland visitors. The property market has dropped 13 per cent from its peak last year and there is no sign of recovery any time soon. Looming over all these problems is the rapid slowdown in economic growth on the mainland.

The disappearance – and subsequent reappearance – of five Hong Kong booksellers has raised a red flag about the rule of law, while incessant filibustering by pan-democrats is paralysing the legislature and holding up key bills. And we only recently had the worst riot in decades.

Economic slowdown, political gridlock and deep social malaise – what is there to like for foreign investors?

Of course, these are just the headlines; we all know about the other deep messes – in education, housing, welfare and retirement, and health care.

There are crises that appear suddenly. What we are staring at looks more like a slow-motion train wreck.

I am not offloading my Tracker Fund shares, though. At 50, I have lived through Hong Kong’s many ups and downs. Each time, it has pulled through.

But that may just be down to my own ignorance about investments, what behavioural economists call “familiarity bias”. Many of us are like Wilkins Micawber in Charles Dickens’ David Copperfield, who is always hopeful that “something will turn up”.