Luca

An investment in China is an investment alongside the people of China and their Government. An investment in the US is an investment alongside the people of the US and their Government. Both are the same thing so whats important is to understand how do the people and the government see your business? If you study CCP releases, Xis speeches, what public officials say, all lights are on green. Nobody wants to take your business away, nobody wants communism and a Stalinist economy, China will remain a partly private partly public economy just like other economies in the west. What is different is that china can regulate the bad parts in their markets and will do so, same should be true for the US but I don't know whats going on inside congress and their plans against mag 7. Alibaba will remain a private business for the coming decades and nothing will change in that regard with a 98% probability. 30% of the worlds manufacturing and industry is in China, ALL incentives are there to cooperate with China and not increase confrontations. If there is war, its over and I will probably be sent to fight in WW3 too so my portfolio will become irrelevant. If you think its thinkable that the same happens with China what happened with Russia then you are wrong, those are two completely different economies, the effect of China cut off would be 20x worse and lead to a hard depression for 5-10 years and global growth will probably stagnate for way way longer, I can afford to lose 25% of my PF in that case. Innovation in China is not to be underestimated, we already see how far they are and Tencent/Alibaba can easily compete with US tech.

Just look at Alibaba/Tencent. Huge buyback programs and 3x the buyback size of MAG 7 while shareprice flat for 10 years. I think its pretty obvious which stock will perform better from here...

So let me get this straight. As a Value Investor, you are looking at the fundamentals (which are good and growing) but then see that the share price has not grown with the fundamentals (dislocation of valuation) and then proceed to not buy it because there can not be dislocation in order for you to buy? In fact, quite the opposite of what a value investor would do.

https://letmegooglethat.com/?q=How+to+invest+into+chinese+stocks%3F+

How can he be SO stubborn, even if there would be overstating of book value, the fundamentals are so great that it's unshortable...pfff

"you cant produce more because consumers are not allowed good prices and business cant have too much competition because the wealthy will loose money of which they have too little and consumers have to much goods and excess wealth"

So funny seeing Yellen ranting about "excess capacity" https://www.reuters.com/world/yellen-meets-with-chinas-central-bank-chief-presses-case-excess-capacity-2024-04-08/ I thought we were in a "free market"? Why don't they just remove the tariffs and US consumers buy it all....;-)?

Ukraine ‘will lose the war’ if US fails to approve aid, says Zelensky https://edition.cnn.com/2024/04/08/europe/ukraine-lose-war-us-congress-zelensky-intl/index.html Republicans blocking the funding...

Thank you for the kind words John and all the best to you!

I enjoyed this. Share your most valued documentaries that enrich our minds!

Point taken. Russia is a good ally to China and basically fully dependent on them now, which is good for China and Chinese investments. More natural resources for cheap and independent from the west.

Will be very interesting what will happen with trump as a president, probably more real talk and not as much double language as now. Id also guess that the US withdraws some of its arms globally which is a net positive. Thats also why trump is hated by the establishment.

Putin regularly pushes that they want to open communications for settlements, China also open to be a mediator but the west and Zelensky is not willing to negotiate anything, not even exclusion of nato membership which is probably key for russia. So ukraine has to sacrifice all of its men/ and now also women, until no one is left, Ukraine totally capitulates and russia is quite weakened and pushed into chinas sphere of influence.

HAHAHA, him now using these memes even to make a case, is incredible.

Would be an interesting question for the annual meeting, considering the huge valuation discrepancy if they see any value in China and/or are willing to allocate some cash there the coming years or if India/West still has enough ideas for them to invest 10b.

High returns on invested capital and easy allocation of larger chunks of cash. I think the investment team certainly has some Asia expertise and these companies have very high earnings yields and IMO a lot more upside than downside. I'd prefer them buying chinese technology stocks than cheap mining stocks right now but that's me. I also don't think you need particular geographic expertise with the well-known large caps.

"This strategy required European trade sanctions against Russia, and similar moves to block trade with China in order to prevent Europe from being swept into the emerging China-centered mutual prosperity sphere. To prepare for its U.S.-China war, U.S. strategists sought to block China’s ability to receive Russian military support. The plan was to drain Russia’s military power by arming Ukraine to draw Russia into a bloody fight that might bring about a regime change. The unrealistic hope was that voters would resent war, just as they had resented the war in Afghanistan that had helped end the Soviet Union. In this case they might replace Putin with oligarchic leaders willing to pursue neoliberal pro-U.S. policies akin to those of the Yeltsin regime. The effect has been just the opposite. Russian voters have done what any population under attack would do: They have rallied around Putin. And the Western sanctions have obliged Russia and China to become more self-sufficient. This U.S. plan for an extended global New Cold War had a problem. The German economy was enjoying prosperity by exporting industrial products to Russia and investing in post-Soviet markets, while importing Russian gas and other raw materials at relatively low international prices. It is axiomatic that under normal conditions international diplomacy follows national self-interest. The problem for U.S. Cold Warriors was how to persuade Germany’s leaders to make an uneconomic choice to abandon its profitable commerce with Russia. The solution was to foment the war with Russia in Ukraine and Russia and incite Russophobia to justify imposing a vast array of sanctions blocking European commerce with Russia."

Russia has to be a gas station for the West with weak subservient leadership, China has to provide the exploited labor pool but can not develop beyond that because they will then take away market share and profits from US firms, leadership ideally also weak and subservient. Europe is already deindustrializing and lost Russia, great. The best world is a world, where 90% of global profits are funneled to US shareholders, and the SP 500 is the only remaining stock market index with a few mega caps and trillionaires that completely own Congress and the government.

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?