Brian Spence
Brian Spence, Managing Partner at S&P Investments, highlights why his adopted country and his original homeland have a lot to teach each other when it comes to improving your chances in life.
It is very unusual to feel as if one is 'living history', but as the coronavirus outbreak rages and the norms of life are torn up around the globe, that is certainly my sense of things. It is even more unusual to feel that the judgement of history is already falling upon its major players, yet that is also the case as we see the consequences of governments’ actions play out almost in real-time. World leaders will have never felt such an incredible burden of responsibility for their citizens’ lives.
One of the better outcomes of this terrible time (and we must search for bright spots, however small) is a general bringing down of barriers and an opening of minds. We are united as a species against this unprecedented, unseen foe and old prejudices and enmities are rapidly being put aside as countries ask how they can help each other and what they can learn from others. In the case of Viet Nam’s handling of the crisis, Western countries should have concluded “a lot”.
Friends back home tell me that much has been made of very successful high-tech, high-discipline response strategies deployed by Singapore, South Korea and Taiwan. Yet Viet Nam’s has received very little attention, despite the authorities and technology sector having done a spectacular job.
Viet Nam has of course not been untouched by this dreadful disease. But my Western friends and colleagues are astonished when I tell them that (at time of writing) no deaths have been recorded – this despite neighbouring China, despite intergenerational families, despite highly crowded cities and conurbations, and a very young, mobile population, all factors which have fuelled mind-boggling numbers of fatalities in Europe. The triple-pronged approach that has been taken here surprises them just as much.
Tech and transparency
Of course, Viet Nam’s containment of coronavirus owes a huge amount to decisive Government action. Having been at the forefront of stopping SARS in its tracks, the Vietnamese authorities quickly consulted the winning playbook. The closure of schools months ahead of most Western countries, along with the introduction of a 14-day mandatory quarantine for travellers have clearly paid huge dividends in Viet Nam.
But equally impressive has been the technological – and informational – might that has been thrown at this pandemic. The NCOVI app (sponsored by the Ministries of Health and of Information and Communications) enables citizens to know exactly when cases have emerged, where to avoid and what they should be doing – including how to get tested.
Viet Nam has rolled out testing facilities to utilise home-grown testing kits that are reported to be accurate, quick and inexpensive. Then there is the National Institute of Occupational Safety and Health going “viral” in the most positive sense by harnessing TikTok to popularise a hand-washing song.
Clearly, Asian countries have a lot to teach the West on testing, tracking and taking difficult decisions to contain coronavirus. Given their experience with SARS and other recent contagions, this is as it should be: they have seen firsthand how exponential growth works with diseases and know that bold, rapid action is the only thing that stops numbers running away to tragic effect.
Experience: the great teacher
Ironically, however, this is just the mindset that I must preach against in an investment context, and it is here that Asian culture could stand to absorb a little Western “wait and see” (or, in fact, a lot). Here again, experience is a great teacher.
Western stock markets having been around for far longer means that there is an abundance of data to learn from, collective experience which can teach us all how to make the numbers work in your favour. We know, for instance, that given enough time equities beat any other asset class by a huge margin and that trying to “time the market” is a pointless endeavour (you are far better to average out peaks and troughs by drip-feeding money in, which is known as dollar-cost averaging).
And more broadly and importantly, Western investment culture understands very well the true nature of risk and reward having seen all the booms and busts through the decades. All too often here, I see almost a casino mentality where investors want the kind of quick, double-digit returns only the riskiest of investments can realistically hold out. The very much more sedate growth rates offered by professional investment managers deploying diversified portfolios are seen to be “boring” by some. Yet as I often preach, if you are constantly trying to recoup significant losses, it is almost impossible to make your wealth grow. Slow and steady really does win the race when it comes to investments – and makes for a very much less stressful journey along the way too.
None of this is to say that there aren’t hugely attractive investment opportunities emerging that a professional adviser can set out for you; the global panic has seen the valuations of otherwise very healthy companies slashed and we could see a raft of winners (possibly entirely new players) emerge in what is likely to be a radically altered world. The point is to pay attention to the numbers and all the evidence Western investment culture has amassed over the decades to discern the right course.
Regular investing with reasonable risk-return parameters might represent quite a cultural shift for Viet Nam’s wealthy. But the evidence bears out that this is the only real route to success long term. Just so on the flipside, the West is having to adapt to a situation where action must be swift and often unpalatably drastic.
Both cultures have a lot to teach each other on the importance of reading the numbers correctly and acting in strict accord with the evidence when the stakes are high. This does call for discipline, of course, along with expertise, but my message is that we can always improve our chances. Indeed, in matters both large and small, we have an obligation to wherever we can.
Please do reach out if you are in need of financial, investment or business advice in these troubled times. For now, I’m sending sincere wishes of health – and hope – to you all.
* Brian Spence is managing partner of S&P Investments. He has over 35 years of experience in the UK financial services industry as an investment manager, financial planner and M&A specialist. He is a regular contributor to the UK financial press and has a deep understanding of the financial services community. Brian’s column will reflect on all the challenges and opportunities within the Vietnamese market, bringing a fresh perspective to today’s hottest issues. The columnist’s email address is brian@sandpinvestments.com.