Mexican Election

[Saluki]

Mexico has elected it's first woman president.  That outcome seemed a given since the candidates from the two largest parties were women.  The winner is from the same party as the current leftist / populist president: 

 

https://www.cbsnews.com/news/mexico-first-female-president-claudia-sheinbaum/

 

The markets are understandably not happy about it.  The Mexican Index and the peso are both down, and some companies which populists like to demonize, like Grupo Mexico, the mining company, are down over 10%.  Time for bargain hunting or cutting your losses and checking back in four years? 

[Eldad]

Hardcore leftist, academic won with 60% of the vote. Pretty strong mandate to follow through on all her neo-commie dreams. I’m out. 
 

 

[Spekulatius]

On 6/5/2024 at 4:04 PM, Eldad said:

Hardcore leftist, academic won with 60% of the vote. Pretty strong mandate to follow through on all her neo-commie dreams. I’m out. 
 

 

I looked into this and spoke to some folks who have connections to Mexico and hence know the situation better and I think you are right. Shein could be similar to Dilma in Brazil where the county lost 5 years.

People elect these populists because the relatively uneducated masses think they can get something for free (wealth transfer from rich people) and at the end everyone tends to be worse off. I think she will be a real problem and I think I will exit my investments, hopefully at a bit better prices.

[Castanza]

13 hours ago, Spekulatius said:

I looked into this and spoke to some folks who have connections to Mexico and hence know the situation better and I think you are right. Shein could be similar to Dilma in Brazil where the county lost 5 years.

People elect these populists because the relatively uneducated masses think they can get something for free (wealth transfer from rich people) and at the end everyone tends to be worse off. I think she will be a real problem and I think I will exit my investments, hopefully at a bit better prices.

 

Are the voting demographics of the Morena party really the uneducated masses? South of the border politics is an interesting animal if so as that's not typically the norm for far left leaning parties. 

[scorpioncapital]

how are such left elections different than say in Canada or the US or Europe? Seems the results are very similar? Are they somehow a different 'flavour' in Mexico? I find it strange that a left woman leader would allow so much drug cartels and crime in their countries. I mean something as simple as water or food safety in two countries has nothing to do with left or right I would imagine.  I think this left / right debate is missing something. There are lots of cultural factors that go into how a country ends up operating in real life, not just the leanings of the politicians.

Edited July 1 by scorpioncapital

[Spekulatius]

On 7/1/2024 at 1:21 PM, scorpioncapital said:

how are such left elections different than say in Canada or the US or Europe? Seems the results are very similar? Are they somehow a different 'flavour' in Mexico? I find it strange that a left woman leader would allow so much drug cartels and crime in their countries. I mean something as simple as water or food safety in two countries has nothing to do with left or right I would imagine.  I think this left / right debate is missing something. There are lots of cultural factors that go into how a country ends up operating in real life, not just the leanings of the politicians.

They are very different. The difference between Social democrats  and the CDU ( center right) in Germany is probably less than between the Dems and the Republicans. Then you have solid public institutions protecting the rule of law. Same between Tory’s and Labour Party in the UK.

 

The new Mexican President talks already about changing the constitution. The rule of law isn’t exactly guaranteed either.

 

I forgot who said it, but Emerging markets are just one bad election outcome away from disaster. While it’s early, I think this election outcome can result in a disaster  - probably  4 lost years in terms of economic progression . This is similar when Dilmar won the succession election in Brazil a decade or so ago.

Edited July 6 by Spekulatius

[scorpioncapital]

You mean the voters are more radical in saying 'what the hell' and rolling the dice on very different leaders? I suppose that is one way that a democracy can be subverted from within via their own people. Heck, I can even see democracy leading to dictatorship. Just vote the wrong people in who then change the rules. Not sure if that is possible in some countries like the US. From what I read, the founders of the nation were very suspicious of government - and possibly voters too. So they created extra systems that made it hard to dismantle the entire system. But I'm not actually sure if it isn't possible. However, I suspect its not just the voters. But implementation of ideas. In the end there are also financial restraints. To some degree, voters give up their day to day country to 'expert government', which may be anything but expert before the damage is done. I actually have a bigger respect now for 'wealth creation'. It is so silent and invisible, yet it is the engine from which many potential successes derive from. 

Edited July 7 by scorpioncapital

[Spekulatius]

Interesting podcast espisode about Mexican stocks from Ian Bezel who ai think lives in SA.

https://podcasts.apple.com/us/podcast/chit-chat-stocks/id1437766060?i=10006652371

 

He is more optimistic about Sheinbaum than I am, based on his observation how she ruled as major of Mexico City. So there is a possibility that she is not as bad as feared or at least better Han the outgoing president (which seemed like an old fashioned 1980’s style socialist). She is not going to be in power until November so there is some time to think about this.

For now, I think I am going to stay put with my Megacable but in a weird market selloff, I might add some shares to lower m cost bases after r$cent sales higher.