The Trouble With(in) Greece?

By Miles Clyne
Portfolio Manager - Tycuda Group

I’ve never been to Greece; I only know what I hear and read. When I say I only know what I hear, what I’m really saying is I know nothing. But what I do know are some basic truths about politics and business, and I believe they apply quite well universally. If you worry for Greece, you should also worry for Canada and most other nations.

I have often stated that there are two primary reasons for chaos in the markets: natural disasters and government policies.  Neither of these are predictable. We have no choice but to accept natural disasters. We do have a choice on political decisions in democratic countries through our right to vote. 

In Greece, Prime Minister Alexis Tsipras put the decision to a public referendum on the austerity program demanded by the Troika. Which I think translated to the PM had no idea what to do.  The people voted a resounding No, which was what the PM recommended.  Now the Tsipras government has overruled the people along with his promises that got him elected, and has kneeled before the Troika.

So what do I know about politics and business?

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In a recent blog, I restated the famous quote from philosopher Will Durant; “Nations are born stoic and die epicurean”.  I think we are seeing this in Greece, and many other countries if we dare to look.  We know many of the decisions politicians and business professionals make are very short term. Politicians theoretically answer to the people through public opinion polls - voting. CEOs in private and public business answer to the board of directors at the firms they work for, and the boards are often responding - like the politicians - to public opinion. Ultimately the game is quite simple: politicians do mostly what they hope gets them re-elected. CEOs also respond to the board and shareholders in ways that allow them to keep their jobs. 

As a population do we want to take the stoic approach? Or do we want everything now? I know I want a good standard of living - good health care, policing, fire protection, roads and other amenities. This is likely in line with what most people want. And like most others, I assume these to be the basic necessities, not luxuries.  So what and who are we going to vote for? The politician who promises us more of what we want? What stocks are we going to buy? The stock of the company that is doing everything it can, at any cost to drive up the price of the stock, increasing our wealth sooner rather than later? 

The blog post where I talk about stoic or epicurean thinking, like this one, is about choice. Greece joining the Euro was a choice. They were promised a lot to join, now they are living with the consequence of that choice. Had they not been a member of the Euro, they could have done what Canada is doing to remain more competitive: institute a low-dollar policy and devalue their currency. I’m not saying this was the solution to the crisis in Greece, but it would have given them another option that they have control over. They are now being dictated to and required to make extremely hard decisions. 

My point is simple. The choice that satisfies you now likely has strings attached. When we make the easy choice, we accept the strings, which may ultimately become a noose. Now the trouble is with(in) us! Whether you are a politician, CEO or a regular Joe, we need leaders. True leaders often do what is unpopular today, but right for tomorrow. My vote is to be and align myself with stoic individuals. 

To emphasize how way too many of us get it wrong, I’ll leave you with this thought. What an epicurean wonders is; how will what happens in Greece affect me? The stoic person’s thinks; whatever happens in Greece, I’ll manage. The reason a stoic person can have a different perspective is because they have always managed challenges and will do what needs to be done.