“When feelings are strong, reason declines and facts get distorted in a miasma of context.” – Michael Masterson

 

Asians in America, Part I:

Why Are They So Successful? 

 

Let’s take a break from identity politics. Let’s talk about Asian-Americans!

 

Just kidding. But the facts are noteworthy.

 

According to a recent Pew Research Center survey, Asian-Americans are the highest-income and best-educated racial group in the US. They are also “more satisfied than the general public with their lives, finances, and the direction of the country.”

 

A century ago, most Asians in America were overwhelmingly low-skilled, low-wage laborers that lived in crowded “ethnic enclaves.” Today’s Asian-Americans have improved the quality of their lives in just about every way that quality of life can be measured.

 

But what may be the most impressive fact is this: These accomplishments were achieved by a group that is primarily immigrant. (Among all Asians in the US, nearly 6 in 10 were foreign-born in 2015, according to the Census Bureau.)

 

If you were interested in the subject of “How to Succeed as a Minority in America,” the history of Asian-Americans would be something you’d want to study.

 

So let’s take a look.

 

A Short but Impressive History of Asians in America

 

Asians began immigrating to the US about 150 years ago. As you might imagine, they were subject to a good deal of social discrimination. They were also the victims of systemic race-based laws and policies – e.g., the Chinese Exclusion Act of 1882, the Immigration Act of 1917, and the National Origins Act of 1924. And let us not forget about the internment of 120,000 Japanese-Americans, without due process, during WWII.

 

In 1965, the federal government passed the Immigration and Nationality Act, which led to large-scale immigration from countries in the Far East, Southeast Asia, and the Indian subcontinent. Each group had its own unique culture. Yet they all shared certain traits that allowed them to make immediate and significant progress – progress that began with the first generation and accelerated with the second and now the third.

 

Today, just 55 years later, Asian-Americans are at the top in every category of “achievement” I could find. Let’s look at five of them: education, income, wealth, unemployment, and health.

 

Education 

 

According to a recent Pew Research Center study:

 

* 87% of Asians aged 25 and older are high school graduates.

* 53% have a bachelor’s degree or higher.

* 23.6% have a graduate or professional degree.

 

Income 

 

In 2018, the median annual household income for Asian-Americans was higher than that of every other racial group. It breaks down as follows:

 

* Asian-Americans – $87,194

* White Americans – $70,642

* Hispanic-Americans – $51,450

* African-Americans – $41,692

 

Wealth

 

Asian-Americans are the wealthiest racial group in the US. In 2013, they ranked second (behind White Americans) in terms of median net worth. In 2020, just seven years later, they are at the top of the list.

 

Unemployment

 

Asian-Americans have the lowest unemployment rate across all racial groups. I couldn’t find post-Corona Crisis numbers, but last year it was an astonishing 3%.

 

Health 

 

Again, Asian-Americans are at the top. According to the most recent data from the CDC:

 

* Only 8.3% of Asian-Americans were reported to be in fair or poor health.

* Only 12.5% of Asian-American men and 4% of Asian-American women smoke.

* Only 11.7% of Asian-American men and 13.6% of Asian-American women are obese.

 

Surprising Data 

 

Before I did the research, I would have guessed that Asian-Americans are less obese than other racial groups in the US. And I might have guessed that they are less likely to be unemployed. But I would not have guessed that they have more education and rank higher in terms of income and net worth than any other racial group (including White Americans).

 

And remember, we’re talking about people that make up only about 5% of the US population and are mostly first- and second-generation immigrants!

 

At a time when attention is so focused on inequality in the US, you’d think that the story of Asian-Americans would be a much-discussed subject. You’d think that scholars and politicians and anyone else concerned with income inequality, wealth inequality, education inequality, and health inequality would be looking to them for ideas about solving the gaps that exist between the races.

 

You’d think. But it ain’t happening. In fact, in academia and the mainstream media, the topic is absolutely taboo.

 

But I find it interesting. And if you do too, you’ll want to read Wednesday’s blog. In Part II of this essay, we will take a look at the values, beliefs, and habits that have allowed Asian-Americans to have such remarkable success, despite the many obstacles they’ve had to overcome.

 

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prebuttal (noun) 

A prebuttal (pree-BUD’l) is an argument constructed in anticipation of a criticism. (Coinage of the word has been attributed to Al Gore.) As used by US News & World Report’s Roger Simon: “There’s rebuttal, there’s prebuttal, and then afterward there’s spin.”

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Six origin groups – Chinese, Indian, Filipino, Vietnamese, Korean, and Japanese – accounted for 85% of all Asian-Americans as of 2015. These groups, together, largely shape the overall demographic characteristics of Asian-Americans.

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Update on My Investment Portfolio:

Why I’ve Just Sold Most of My Stocks 

 

“Be fearful when others are greedy, and be greedy when others are fearful.” – Warren Buffett

 

I’ve just sold about 75% of my stock portfolio. I’ll tell you why…

The Economic Outlook Is Scary

At a macro level, our economy is fragile. For one thing, the US has never been in so much debt. The national debt has been growing pretty much non-stop for 20 years, but it accelerated significantly under Obama and Trump. It is currently $26 trillion. That is 107% of our GDP. The last time the debt-to-GDP ratio was that high was in 1948, at the end of WWII.

And then there is our consumer debt: the debt private citizens carry on mortgages, loans, and credit cards. That hit $14 trillion in March, a record high, surpassing by almost $1 trillion the record set at the height of the 2008 financial crisis.

This level of debt is scary. But what’s scarier is that there are only two or three elected officials left that believe in balanced books and sound money.

The business outlook is bleak. Since January, US GDP has dropped nearly $3 trillion, from $21.8 trillion to $19.2 trillion. Thousands of small and medium businesses, employing millions of medium- and low-skill workers, have been shut down. The economists I trust are prognosticating that as many as half of them are closed for good.

By these and many other metrics, the US economy today resembles that of the economy after the real estate bubble collapsed in 2008, except for debt, which is worse. Given that, it seems reasonable to believe that we are looking at an attenuated recession and a feeble recovery.

Longtime readers know that I don’t buy or sell stocks based on macro analysis. But I don’t ignore it either.

 

The Upcoming Election

This is the main reason I converted 75% of my stock portfolio to cash.

The pollsters and their pundits are predicting that Trump will be ousted in November and the Democrats will sweep the House and perhaps even the Senate. The Democratic agenda is for higher social spending, $500+ billion on infrastructure, and higher taxes for businesses and high-income earners. But I’m even more concerned with the talk about eliminating the cap on the Social Security tax.

Wall Street doesn’t respond well to the threat of higher taxes. So as we approach the November elections, if it looks like Biden will be elected and the Democrats will win both houses of Congress, it’s very likely that we’ll see a big drop in stock prices. A 30% to 50% drop wouldn’t surprise me.

So those are the three reasons I decided to sell most of my stock portfolio: I have a continuing concern about US debt, a suspicion that we have entered into another extended recession, and a strong hunch that if it becomes apparent that the Blues will dominate the November elections, the stock market will take a dive.

Longtime readers will rightly be surprised to know that I’ve sold off 75% of my stock holdings. They will remind me that my investment philosophy has always been to buy world-dominating companies and hold them long-term. They will further remind me that as recently as April 6, I repeated that viewpoint in explaining why I did not sell any of my stocks as the markets were tumbling from the Corona Crisis.

Yes, I’m violating that rule now. Let me take you through my thinking process…

I “lost” millions in March and April. The loss was just on paper, but it still didn’t feel good. Because I didn’t panic and didn’t sell then, I was able to see the market climb back up this “wall of worry.” And now I’ve regained (again, on paper) all that I had lost.

The balance of my stock portfolio is at an all-time high. But there is a fair chance that the market will take a dive sometime between now and November. And if it does, it could be, as I said, a steep dive – 30% to 50%.

So I did what I sometimes do when I’m in a confusing situation like this. I interviewed the three parts of my brain.

First, I asked my limbic brain, the part that’s in charge of my emotions: “How would you feel if that happened?”

And Limbic Brain answered: “Like horse shit. Like a fool. But I would blame-hate you for keeping our money in the market.”

Then I asked my reptilian brain, the part that’s in charge of my instincts: “What would you do if Limbic Brain felt like that?”

And Reptilian Brain answered: “I would definitely panic. I would be afraid the market would drop even further. I would take flight. I would tell Limbic Brain to sell everything – all of our stocks – immediately and eat the loss.”

And finally I asked my rational brain: “What do you think of all this?”

And Rational Brain said: “Normally, I’d tell you to ignore Limbic Brain. I’d say that Reptilian Brain is bluffing. But in this case, why take the chance?”

“What do you mean?” I asked.

Turning to Limbic Brain and Reptilian Brain, Rational Brain said: You have told us how badly you would react if our portfolio dropped again by 30% to 50%. How good would you feel if we held on to our stocks till November and they went up in value?”

“Like by how much?” they asked.

“Say, 10% to 15%,” Rational Brain said. “Which, I might remind you, would be an unprecedented three-month climb, considering where they are now.”

Limbic Brain and Reptilian Brain went into the corner, as they always do when confronted by Rational Brain, and conferred. After a few minutes, they emerged.

“So how would you feel about our making another 10% to 15% on top of our current gains?” Rational Brain asked.

Limbic Brain shrugged. Reptilian Brain, lacking shoulders, said, “Meh.”

Rational Brain turned back to me. “As you can see,” he said, “my less intelligent but immensely muscle-bound siblings don’t really care if our stock portfolio goes up. But they really, really are going to go nuts if it goes down again.”

“Yes, I can see that,” I said.

Rational Brain leaned forward and stared into my eyes. “You know what you should do,” he intoned. “Sell all or most of your stocks right now and wait until November. You will be giving up the unlikely possibility of getting modestly richer over the next three months. But you will be safe from the more likely possibility of becoming considerably poorer.”

“That makes sense,” I said to Rational Brain.

He winked. “That’s what I’m here for.”

And that’s why I sold 75% of my stock holdings. If you are having some of the same concerns regarding your investments, conduct an interview. Your brain parts are yours, formed by your own knowledge and experience. See what they have to say. And then do what your Rational Brain advises.

 

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prognosticate (verb) 

To prognosticate (prahg-NAH-stih-kate) is to predict something about the future based on present indications or signs. As I used it today: “Thousands of small and medium businesses, employing millions of medium- and low-skill workers, have been shut down. The economists I trust are prognosticating that as many as half of them are closed for good.”

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The US national debt (currently $26 trillion) falls into two categories: intragovernmental holdings and debt held by the public. Foreign entities own about a third of the public debt, while the rest is owned by individual investors, corporations, state and local governments, and Federal Reserve banks.

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“If We Lose John Locke, We Lose America” 

John Locke has been a writer on my must-read list since I became interested in history (for the first time) just 20 years ago. This video made me push him up to the top of the list. LINK

 

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