by Gary Alexander
July 12, 2022
As you read this, I’m off to the 15th Freedom Fest in Las Vegas. I’ve been to them all. It started on 7-7-07, a lucky number in Las Vegas, and I’ll be turning 77 on Friday, so I guess it’s my lucky day for betting something… But I’ve got more serious issues on my mind. On Friday, I’ll join one of several film panels, this one on “Battleground Melbourne,” a film about “the world’s most livable city” that quickly became “the world’s most locked down city” in March 2020 in response to COVID, with people locked in public housing before protests began with 70 people, eventually reaching 450,000 facing down police.
Daniel Andrews, Premier of Victoria, Melbourne’s governing province, issued vaccine and mask mandates, travel limits, curfews, and five separate lockdowns, arresting many who posted or suggested meeting spots for demonstrations. Victoria was not alone. According to Conor Friedersdorf, writing in The Atlantic (“Australia Traded Away Too Much Liberty,” September 2021): “The government of South Australia, one of the country’s six states, developed and is now testing an app as Orwellian as any in the free world to enforce its quarantine rules. Returning travelers quarantining at home will be forced to download an app that combines facial recognition and geolocation. The state will text them at random times, and thereafter they will have 15 minutes to take a picture of their face in the location where they are supposed to be. Should they fail, the local police department will be sent to follow up in person.”
This was surprising to me, since according to many polls, Australia was high on the list of “economic freedom” in surveys by the likes of Freedom House or Heritage Foundation. For instance, here is the list of the Top 5 and bottom 3 nations ranked for economic freedom by the Heritage Foundation, pre-COVID.
|2019 Index of Economic Freedom|
|Source: Heritage Foundation|
Most of us would agree with the sorry state of the bottom three – Cuba, Venezuela, and North Korea, all of them Communist holdouts – but how about the top five? Is there some fundamental flaw in the formula that was exposed when COVID struck in 2020? I’ll focus specifically on #1 and #5. Why them?
Let me back up and tell you that I am a “senior judge” at the Anthem Film Festival at Freedom Fest, with “senior” meaning I was there from the beginning, over a decade ago, when that freedom-oriented film festival had a handful of marginal films seen by a few dozen attendees. Each year, I have the honor of previewing and commenting on each film and each year it is getting harder to find flaws in any of them.
Here are three of the best in this year’s Anthem Film Festival, each with a focus on economic freedom:
How Hong Kong, the 2019 #1 Freest Nation on Earth, Disappeared from the 2022 List
In the 2022 list, Australia was demoted to #12 and Hong Kong disappeared, swallowed by China.
|2022 Index of Economic Freedom|
|(China is the 158th freest of 184 nations)|
|Source: Heritage Foundation|
This brings me to a second documentary at Freedom Fest’s Anthem Film Festival, “The Hong Konger: Jimmy Lai’s Extraordinary Struggle for Freedom,” just released in May 2022 by the Acton Institute.
Jimmy Lai had the unfortunate luck to be born into a rich family in China in late 1947, just before Mao Zedong took control and punished rich families most severely. Lai lost his parents at age five and had to struggle to survive by hauling luggage for tips at train stations until he met a Hong Konger who was his image of Superman. At age 12, Lai smuggled himself in the bottom of a fishing boat to escape to Hong Kong where he began as a textile runner and within 30 years built his firm, Giordano, into an enormously successful clothing business in thousands of stores worldwide. Chilled by China’s 1989 crackdown on Tiananmen Square, Lai sold his textile business and launched Next Media, publishing Hong Kong’s top newspaper, Apple Daily, a voice for political free speech, especially after Hong Kong’s transfer to China in 1997, after which China promised to keep hands off Hong Kong 50 years, as ‘one nation, two systems.’
That promise lasted 20 years, not 50, until Xi Jinping cracked down on Hong Kong and raided Apple Daily, shutting down the paper and throwing Lai in prison (since late 2020). Lai could have emigrated to America or Europe decades ago, but he is a Hong Konger to the end, because Hong Kong saved his life.
Hong Kong citizens staged peaceful protests of up to two million people at a time, many carrying their yellow umbrellas as protection against tear gas as well as rain, but China has all the guns, which makes economic freedom theoretical and Mao’s maxim true: “Political power grows out of the barrel of a gun.”
Hong Kong’s Hang Seng index peaked in early 2018, just before China cracked down on Hong Kong’s freedoms. Here’s the financial outcome of the death of political freedom – erosion of financial fortunes:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Locking Down the Young and Healthy is the Worst Solution
The third film is perhaps the most devastating of all. “Planet Lockdown” interviews 30 experts, mostly medical but also ethical, political, and economic experts, showing how lockdown was precisely the wrong formula for solving a medical crisis. Historically, science and medicine might quarantine those with a communicable disease or those at greatest risk, but most nations locked down everyone, with the term “lockdown” most closely associated with maximum-security prisons with highly limited mobility.
Lockdowns sent most economies into deep recession, if only for a quarter or two, but created a long-term problem of supply shortages, labor disruptions, and small business extinction, all while ignoring the many other societal ills caused by lockdowns, including two years of missing or substandard education, suicide, drug and alcohol abuse, other health crises, and depression. One physician interviewed in Planet Lockdown, Dr. Louis Fouche, formerly an ICU Doctor in Marseilles, France, and Founder of ReInfo, COVID, said, “They call it a health problem, but if you unfold the monster, you will see a medical crisis, science crisis, social crisis, political crisis, financial crisis, economic crisis, school crisis and labor crisis.”
Note: “Planet Lockdown” and “Battleground Melbourne” are available on YouTube, as is the preview to “Hong Kongers,” but please support filmmakers by renting them, or sample the Anthem Film Festival.
In summary, Hong Kong was always vulnerable to China, especially under cover of COVID, while New Zealand and Australia were island nations capable of controlling COVID immigration better than most, but they used the pandemic to exert unwarranted control, “Not letting a crisis go to waste.” That’s why surveys of economic freedom are useless unless a country has military strength and political freedom.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Core Inflation is Steadily Declining
Income Mail by Bryan Perry
A Heavy Week Ahead for Inflation Hawks and Doves
Growth Mail by Gary Alexander
Beware Economic Freedom without Political Freedom
Global Mail by Ivan Martchev
A Euro Deep Below Dollar Parity is Now Likely
Sector Spotlight by Jason Bodner
If We Enter a Recession, Will it be Mild or Extra Strength?
View Full Archive
Read Past Issues Here
About The Author
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.
Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.
None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.
Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.
One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.
ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:
- ETF shares may trade above or below their net asset value;
- An active trading market for an ETF’s shares may not develop or be maintained;
- The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
- The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
- Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.
Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.
Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.
This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at www.adviserinfo.sec.gov or by requesting a copy by emailing email@example.com. All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.
FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.
IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.
Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.
Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.
FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.