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Diane Francis is a Toronto-based journalist who began her career as a financial writer before branching out into geopolitics. She publishes a twice-weekly newsletter that has readers in 106 countries around the world. Born in the United States, Francis is a dual citizen possessing unique expertise that allows her to comment on the intersection of economics and politics. She was recently John De Goey’s guest on his podcast “Make Better Wealth Decisions” (https://make-better-wealth-decisions.captivate.fm/listen) and offered some candid thoughts about investing in a time of great uncertainty and upheaval.
De Goey is a portfolio manager with Designed Securities in Toronto. “Make Better Wealth Decisions” is a popular, twice-weekly podcast about investing and money management.
Early in the interview De Goey asked Francis about this confluence of economics and politics, and how one should make decisions when there are so many unknowns out there. Francis responded by referring to her days as a financial writer when she wanted to find out what was going on in a particular country.
“I would call an investment banking analyst who covered that area,” she said. “They know more about what’s going on in that country than any politicians or any journalists because they’re making dollar decisions on whether to buy the bonds, sell the bonds, buy the stocks or get involved in the private investment in that country. So I realized that was one of the most important pillars underlying how you should invest.”
She has brought this expertise to her work as a journalist. Francis is a columnist and Editor-at-Large for The National Post in Canada, and also writes for the Kyiv Post in Ukraine, and Ukraine Alert at the Atlantic Council’s Eurasia Center in Washington, D.C., not to mention the Huffington Post, New York Post, among others. What’s more, she holds an MBA and is a CPA as well. And she is a former U.S. Army Intel Analyst.
How downgraded U.S. credit rating could affect investors
De Goey pointed out to his listeners that she has written a number of books and one of the first, published back in 1990, was The Diane Francis Inside Guide to Canada’s 50 Best Stocks. Their discussion then moved into the U.S. credit rating being downgraded and how this might affect investing. Francis said it’s a concern when investing in bonds, but not so much in stocks, and shouldn’t matter if you invest outside the U.S.
She then revealed some insights about her own investing in lieu of European countries now boosting their military expenditures. She said she bought into companies in Germany that are involved in the military area and called them “winners.” By the same token, she said she has invested in Taiwan SemiConductor (TSMC) and made money doing that.
De Goey moved on to what he called the ‘Donroe Doctrine’ and Trump’s realigning of the world order. He mentioned the acronym that has been making the rounds in some media – TACO – for Trump Always Chickens Out when it comes to tariffs. But Francis said he doesn’t chicken out because it’s just a negotiating tactic on his part.
TACO vs TUDIE
“The tariff strategy is quite interesting and I know a lot of people won’t agree with me but I think it’s brilliant,” Francis said. “It’s ruthless and it’s not nice to do to trading partners but imagine what he’s done. He’s harnessed the buying power of the richest country in the history of the world and he’s beating the people who want to supply it with stuff over the head, asking them for bargains in the form of tariffs.”
De Goey used an acronym that he himself coined – TUDIE – for Trump Usually Does It Eventually. Francis didn’t disagree with that assessment and said Canada must do more than whine about the tariffs. She said we should do what Japan and South Korea did, namely, make deals to get their tariffs lowered. She added that Canada is teetering on a recession largely as a result of the Trump tariffs, but criticized Canada’s own policies over the years with such things as immigration, the military, lack of NATO commitments, etc.
The conversation moved on to countries retaliating against the U.S. with tariffs of their own and a possible trade war. De Goey brought up the tariffs that were levied back in the 1930s by the United States and the retaliation that ensued, leading to a global trade war and deepening what was already a severe recession and, ultimately, the Great Depression. Francis had some definite views about that. In fact, she didn’t think a global trade war is coming at all.
Tariff Retaliation is stupid
“I think retaliation is stupid,” she said. “You can’t retaliate. America is Canada’s biggest customer, supplier and investor. You can’t shoot yourself in the foot. I think this is a negotiation. You give. You take.”
She said there still remains a lot of good will between the U.S. and Canada. Before the interview closed, De Goey wanted to get into the war in Ukraine. As a journalist, Francis has been to Ukraine some 30 times and often writes about that war today. She said European countries are finally smartening up by boosting their militaries, and further, that we are at the “beginning of the end” of this war, adding that Trump’s new stance with Putin is a positive development. Francis has hopes for what she called a “semi-permanent ceasefire” but said Ukraine may have to lose 20% of its land in the process. But real peace, she said, will require boots on the ground for security purposes and NATO membership for Ukraine which she said could be one of the most dynamic economies in all of Europe.
When De Goey asked her about which interpersonal relationships are key, her answer was simple. “What’s your relationship with the Trump government?” Francis said. “This is the most powerful country in the history of the world from a military and economic viewpoint, and he was duly elected.” However, Francis does hold grave concerns about Trump’s relentless bashing of Fed Chairman Jerome Powell.
Said Francis: “As an investor I want to know what is going to be resolved over the Fed Chairman being taunted or fired by Trump. That will affect every country in the world.”
John De Goey, CIM, CFP, FP Canada™ Fellow, is a Portfolio Manager with Toronto-based Designed Wealth Management. He is the author of three books on the financial industry: The Professional Financial Advisor, Standup to the Financial Services Industry and most recently, Bullshift. You can find John’s personal website here
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