What was it like?

What?

Parisduring the riots.

Were there riots?

Every country has its railroad tracks. And some people are inevitably on the other side of them. In Paris, poor people tend to live in the suburbs. One of them got killed by police last week. Those of us in the centre of town barely noticed.

Nationwide, the French seem to be having their own George Floyd moment.

Heres CNN:

Chaos, destruction and confrontations have led to curfews in some towns around the capital. Bus and tram services faced disruptions with a nationwide shutdown ordered for 9:00pm on Friday to try to stem another night of violence.

Areas within some of Frances major cities have erupted in violence for several successive nights after a teenager named Nahel Merzouk, reportedly of Algerian descent, was fatally shot by police  an incident caught on video.

More than 800 people were arrested the night of 29 June, as outrage continued to intensify. Merzouks death appears to have become a flashpoint for anger about racial inequality in France and claims of police discrimination.

Culture warriors

Meanwhile, racism is a big deal in the US too. There is a whole brigade of culture warriors ready to call it outstamp it outand duke it out. They see racism everywhere.

The Daily Beast: White Professor Disgusts Women Historians Conference:

A conference for female historians this weekend was plunged into turmoil when a prominent white academic speaking at the main event said her professional life would have been easier if she were black.

She was immediately called out for her blatantly racist remarks, and refused to apologise, let alone listen, to the reason why her remarks were horrifyingly wrong

And heres another click-baiting headline from something called BuzzLoving:

White men are a danger to society, says a member of San Franciscos reparations committee.

This past weekend, the US press reeled and railed over the Supreme Courts latest decision on universities race-based admissions programs. In brief, the court recognised that you cant discriminate in favour of one group (blacks, for example) without discriminating against another (Asians, for instance).

This anti-racist decision was immediately attacked asyesracism!

Fox News:

Jemele Hill accuses Asians of carrying the water for white supremacy for backing affirmative action decision.

Harvard pledged to go forth and sin no moreat least not openly. It said, however, that it would continue to take other circumstances, beyond test scores and academic achievements, into account.

One of the best pieces of advice I received early in my financial advisory career came from a seasoned investment professional.

His words still ring in my ears

Vern, whenever you hear this five-word preface you cant go wrong buying, thats the moment when everything can go wrong.

Why?

Because once every man and his dog thinks something is a sure bet, cant fail, one-way trip to assured wealth, it means that all risk has been discounted out of the investment equationand thats when an investment contains its most risk.

The only thing thats guaranteed in this business is there are no guarantees.

There are two components to an investmentincome and capital gain.

Neither is assured.

For example, in April 2020, during the COVID meltdown, APRA Chairman, Wayne Byres, penned a letter to the banks, stating:

APRA expects ADIs [Authorised Deposit-taking Institutions] and insurers to limit discretionary capital distributions in the months ahead, to ensure that they instead use buffers and maintain capacity to continue to lend and underwrite insurance

As reported by IG Capital at the time

In response to APRAs letter; Macquarie analysts today said that the big four banks may be forced to either reduce or suspend their next wave of dividends completely.

Looking at a stressed scenario; Macquarie posits that bank losses could run as high as $2527 billion per bank. In this possible world, the banks ability to pay dividends (without raising equity) materially diminishes, it was noted.

Recent history has taught us that other sources of income are not set in stone either.

In 2010, with the RBA cash rate around 5%, who would ever have thought a decade later, money in the bank would earn next-to-nothing?

Who could have anticipated how work-from-home would upset the commercial property applecart?

With higher vacancy levels, per-square-metre rent rates have come under pressure.
Landlords have suffered a double whammyfalling rental income and lower property values.

Nothing is ever absolutely guaranteed

Things happen that can change market dynamics.

And what was once placed in the category of you cant go wrong buying, suddenly shifts to how did we get this so wrong?

Of the two types of investment returns, income is perceived as the bird in the hand, while growth is the two in the bush.

So, how do you increase the odds of holding onto that bird in your hand?

With the guidance of someone who has been there and done that.

This is an unashamed plug for my good mate, Greg Canavan

Ive been in this business for 37 years and have seen a lot of investment professionals....