Here comes electile dysfunction | What do you expect from two septuagenarians? |

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Hi John, here's what you need to know for November 3rd in 3:10 minutes.

☕️ Finimized over an autumn tea at Nedelka in Almaty, Kazakhstan (14°C/57°F 🌤)

Today's big stories

  1. We look at what might happen to markets if the president wins a second term
  2. One venture capitalist has laid out the 10 key metrics you need to decide which subscription businesses to invest in – Read Now
  3. We look at what might happen to markets if Joe Biden wins the US presidency
1/3

Trump Change

Trump Change

What’s Going On Here?

The 59th US election takes place on Tuesday, so we’ve taken a look at how investors might cash in if the current president is right on the money.

What Does This Mean?

If the current president wins again, the most likely situation is a Congress – the law-making arm of government – split between two parties, with the Democratic Party holding onto its House of Representatives majority and the Republican Party keeping control of the Senate.

If that’s the case, investors can probably expect more of the last four years: a renewed trade war with China, as well as rising trade tensions with Europe. Coronavirus will be on everyone’s minds too: the warring parties haven’t had much luck reaching an agreement on government support so far, and investors will be keen to know what – if anything – is next.

Why Should I Care?

For markets: China last.
A Republican presidential victory is likely to eliminate the chances of a low-cost public healthcare option, which some analysts reckon will boost the shares of US healthcare companies that would've had to compete on price. Energy companies might get a lift too, seeing as Republicans are generally at odds with Democrats’ greener views. On the other hand, China’s stocks might come under pressure if the trade war picks back up – even though they’re a favorite among investors who expect the country's economy to be the only major one to grow this year.

For you personally: Don’t worry, be happy.
Analysts largely agree that most investors – especially those focused on the long term – shouldn’t alter what they do with their money based on a single (if pretty monumental) election. The US stock market has, after all, risen by 6-7% annually since 1993, no matter who was running the show. For all the volatility and uncertainty to come, you’re probably better off sitting back, relaxing, and letting your investments do their thing.

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2/3 Premium

10 Ways To Spot The Next Big Subscription Business

What’s Going On Here?

Venture capitalist Nikhil Basu Trivedi hasn’t just been investing in subscription services for years: he’s been there, run that.

That’s given him an insider’s insight into which of them are actually worth investing in – and a strategy that boils down to 10 key metrics.

The most important of those? Subscriber retention. If a subscription business is able to hold onto its subscribers, Nikhil reckons, it’s clearly delivering something of great value.

All the other hiccups, he says, can be worked out.

Nikhil was happy to walk you through his strategy for spotting the very best subscription businesses, as well as some of his favorites. Spoiler: he’s backing Netflix, Spotify, and – yep – Zoom.

The interview’s a great listen. Check it out with Finimize Premium.

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Ridin’ With Biden

Ridin’ With Biden

What’s Going On Here?

Former vice president Joe Biden is the odds-on favorite to win the US presidency, so we’ve looked at where investors might bet their bottom dollar if he does.

What Does This Mean?

Both prediction and financial markets are pointing to a “blue wave” in which Democrats take control of the presidency, the House of Representatives, and the Senate (tweet this). And with both the law-making and executive branches of the government under their control, it’ll be far easier to pass new rules and regulations.

One of the priorities will be another hefty coronavirus support package, as well as an estimated $2.2 trillion worth of infrastructure and climate-related spending. Democrats are also likely to come down hard on Big Tech – with a view to both limit its influence on elections (among other things) – as well as raise much-needed taxes, which they might then use to start repaying the money borrowed to battle the pandemic.

Why Should I Care?

For markets: Stocking up on value.
More spending from Democrats would send more money into the US economy, which would hopefully boost its growth prospects and, in turn, increase inflation forecasts. And even if the prices of goods and services don’t actually pick up, the expectation they will could lead the US central bank to increase interest rates. That possibility’s historically encouraged investors to sell off things like government bonds and buy into cheap-looking “value” stocks.

The bigger picture: Nothing’s certain but death, taxes, and wind.
One industry likely to do well from a Democrat victory is renewables: fresh tax subsidies and the prospect of offshore wind projects could give related companies a boost. And even if there is a Republican victory, our analyst reckons they could still do well. With record numbers of mail-in votes, the final election result probably won’t be known for days if not weeks after Tuesday, so having an eye on investments that might do well in either case could be handy.

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💬 Quote of the day

“The harder the conflict, the greater the triumph.”

– Thomas Paine (an English-born American political activist, political theorist, and revolutionary)
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🤔 Q&A · RE: What A Headache

“What caused the difference between beer makers Heineken and Carlsberg’s performances?”

– Michelle in Malaysia

“Both brewers actually had better-than-expected third quarters on the face of it. Heineken primarily had Europe and Asia – where it sold more than expected – to thank for that: combined, they provided 57% of its sales. Carlsberg, meanwhile, saw its European sales offset weaker-than-expected Asian sales. But what really separated the two companies was their respective outlooks on the rest of the year: Carlsberg upped its annual profit prediction, while Heineken – worried its costs were too high – announced job cuts. Mix in the fact that Carlsberg’s shares were cheaper than Heineken’s when compared to its estimated future earnings, and investors chose to buy up the cheaper-looking shares of the optimistic company and sell the expensive-looking shares of the pessimist.”

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