Luca

Interesting comments by Hayden Capital:

This picture pretty well describes the industrial stagnation/deindustrialization within the US. How will the US be ever able to compete in manufacturing again with their degree of financialization? Considering also that so much of the infrastructure is privatized, concentrated, and inefficient. Rents too high for labor having low wages, to compete internationally, infrastructure investment for industry is not existent, energy transition depends on foreign supply chains of the Chinese enemy. It will turn out to be the biggest mistake, short term profit thinking, outsourcing labor to asia to save money and now the industry is gone, asia can produce themselves and the US with very concentrated wealth but little fundamentals left.

Id love them to allocate 1-2b into China large caps but I am aware that I am in a minority position with that

@Viking, what are your thoughts on those private investments into ShawKwei, Grivalia and BDT and what do they say about Fairfax as a capital allocator?

Last 10 year sales growth of the SP 500 was around 4% if i remember correctly, at stable margins and stable earnings multiple and sharecount flat, you will make 4%+the dividend yield. So yes, 5-6% is a realistic scenario.

Where does it say facts? Please provide a quote. What? I have made a point regarding the US interfering with the Chinese political situation by slandering an important infrastructure project. What have I ignored here?

Why is the US so desperate that they use CIA to create fake social media accounts that try to prevent belt and road projects? Doesn't that clearly show it is very smart to continue to do that if the US is willing to go that far?

"Promoted allegations" under secret identities with fake chinese social media accounts. That tells you all you need to know.

The CIA team promoted allegations that members of the ruling Communist Party were hiding ill-gotten money overseas and slammed as corrupt and wasteful China’s Belt and Road Initiative, which provides financing for infrastructure projects in the developing world The efforts within China were intended to foment paranoia among top leaders there, forcing its government to expend resources chasing intrusions into Beijing’s tightly controlled internet, two former officials said. “We wanted them chasing ghosts,”

The secret service of the US actively tries to block chinas interest by having misinformation campaigns against them. Its not ONLY China that is the bad guy here. That was the point. They are not publishing that there ARE corrupt officials but they spread misinformation and sow distrust within the chinese community.

Ahhhhhhhh....FOMO.

"only bad when the west does it" LOL, have you read the news the last years? I read only china bad china bad. Finally we see some of the dirt the wests pulls... The more interesting thing about this is to stop the belt and road initiative, that tells you a lot about the potential of this project. Chinese surely should know about the wealth of their leaders, never argued against it. I just enjoy seeing the CIA deep down in the dirt too, its not only China

How large was the position?

So then we read all over the news how "bad" the belt and road initiative is, bad china etc...while trump and the CIA try their best to block china just from developing and spreading their interests, same as everyone.

https://www.reuters.com/world/us/trump-launched-cia-covert-influence-operation-against-china-2024-03-14/ Like, how afraid do you have to be as president and administration that you ask the CIA to PLEASE sew disapproval for the belt and road initiative within the Chinese society... How pathetic is this: "The CIA team promoted allegations that members of the ruling Communist Party were hiding ill-gotten money overseas and slammed as corrupt and wasteful China’s Belt and Road Initiative, which provides financing for infrastructure projects in the developing world, the sources told Reuters." And then the US gets mad that the CCP tightens its grip on their local media...

We will see what happens, I think we are at the bottom now and that bottom is very comfortable to sit on compared to the lofty highs for the US...id not feel comfortable up there...meanwhile we collect the dividends and buybacks and let the Chinese work...

I think the odds are over 90% that these businesses will just chugg along and do their thing, invest into china, asia in the world, they will buy back their stock, they will issue dividends etc just like western peers and as they already did the last 10 years.

Just look at PDD, brilliant founders, management team executing like no other business, utilizing the huge manufacturing powerhouse of the peoples' republic and the scale is so huge...3b earnings last quarter, bombing everything away, trading at 10x earnings NTM...you tell me how something like PDD looks like when chinas GDP doubles the next 15 years and the Asian region grows...they all look like multibaggers and already have been. BUT the market hates it... https://www.scmp.com/news/china/politics/article/3256500/china-ready-remove-barriers-foreign-companies-premier-li-qiang-tells-international-forum?module=top_story&pgtype=homepage Does this sound like Stalinist central planning?: Li said the Chinese government was “carefully” studying some of the issues raised frequently by businesses, including market access, public tendering and cross-border data flow. “Some of the questions have been basically resolved, and for some others we are still working on solutions to ensure a good settlement,” he said, two days after China eased security checks for cross-border data transfers. He also said Beijing would make government services more efficient and protect the lawful rights and interests of businesses of all types. “We are convinced that a more open China will bring more opportunities of win-win cooperation to the world,” he said. President Xi Jinping signalled China’s interest in foreign investment and hi-tech firms with a trip last week to BASF Shanshan Battery Materials, a Chinese-German joint venture producing lithium battery materials in the central province of Hunan. Commerce Minister Wang Wentao has also met an array of top global tech, finance and pharmaceutical executives, including Apple chief Tim Cook as well as the CEOs of US chip markers Qualcomm and Micron and South Korean semiconductor producer SK Hynix. “China is now working to build a modernised industrial system with advanced manufacturing as its backbone, which is also an opportunity for the world,” Li said. He also highlighted the importance of the nation’s “vibrant and dynamic” private sector in bolstering economic growth through generating confidence to invest, expand business and create employment, which in turn leads to consumer confidence.

Which economy will grow better: A): An economy that is mostly deindustrialized and harms their own energy consumption with green initiatives promoted by ideologues: 40% of GDP coming from "insurance" and "finance"+"business services"+"healthcare" B): An economy that has a huge industrial base, local supply chains, large and cheap worker pool

The game got a lot better for china now with Russia as a very reliable resource exporter and economic partner, the KEY partner Europe needed. India also doesn't say no to Russia The sanctions completely backfired, Europe has weakened incredibly while US still feels threatened by global south alliances. But "everything" is collapsing in China, and they are very mean people (no democracy!!!!), very dangerous, we need to encircle them and pressuring them into subordination and stop them to try to get independent and exert their interests globally!

They are competitive already on all fronts except semiconductors. Nobody can say with certainty how and if they can catch up, black box. Although I wouldn't say, it's impossible. The more I think about china, the more I come to the conclusion that they are in a window of opportunity for their country right now that could easily close with foreign interference. If I see Trump already using intelligence services to sow distrust against the Chinese government, the US likely feels threatened in their economic dominance, justifiably so. To counteract that, china needs strong leadership that can not be influenced by foreign sponsored pro-democracy movements that try to move china back into a US satellite position that just serves as a giant market for us firms. Putin knows that, Xi knows that... Based on chinese infrastructure, access to universities, talent pool, local industrial base there is so much potential, even more than for the US which has deindustrialized a lot, making local processes slower. The growth story in China is far from over.

I like him, too, regularly check his filings to source ideas!

What do you think are his conclusions, and why are they wrong?