Luke

Really enjoy Neil Young as well! Great recommendation, i havent listened to everything he made but like quite a few songs from him. Trasher is one of my all time favourites, listened countless of times to it...lyrics are so beautiful, song just hits hard...that harmonica in the end as well...just amazing music...

I think that depends, and macron sees it similarly IMO, about which conflicts we are talking about. If US politicians or the government engages in talk that provokes and increases tension, engages in economic war, we as europe shouldnt allow someone to force our hand. Why are the netherlands stopped from delivering semiconductor machines? For very arbitrary reasons? Why is the US blocking dutch business? If there is a serious conflict that is based, highly likely europe will come and support but we shouldnt HAVE to rely on the US. Strategic autonomy goes both ways, not only versus China. Depending on the definition of war, its already a war but not a military one yet. I dont think macrons moves are increasing the likelyhood of the war, circling China into a corner and threatening them increases the likelihood of further escalation. “Europeans cannot resolve the crisis in Ukraine; how can we credibly say on Taiwan, ‘watch out, if you do something wrong we will be there’? If you really want to increase tensions that’s the way to do it,” he said. IMO the US intervened into too many things where they should not have. A world war obviously was a necessary intervention and i doubt that any western country would sit still if China goes on Raid like the Germans did.

I think they will have to face reality sooner or later, as they had with COVID.

Sure, there are many things they have to fix but i am quite confident china will do fine over the course of the next years and as i said, longterm trendline looks pretty good too in terms of possible growth. Their biggest megacap Tech business with great management trades at 8x earnings for the core business if we exclude their equity portfolio (tencent)...sure, some prefer to buy Starbucks at 40x earnings (that has a ton of business and growth in china priced in) or buy one of the best global tech businesses at a very cheap multiple. If the short term noise of collapse and war subsides, these businesses continue to do fine and innovate, china continues to throw out impressive growth numbers over time, its a pretty good bet. Also remember all the hype about alibaba when they traded at 300$ a share. The sentiment is weak, the story is very weak. I think the winds will change after a couple of years.

Since China had one of the most severe lockdown policies and came out of lockdowns the latest of all countries i dont find the results unexpected. Look at US unemployement in young people during lockdowns:

1. Long before the United States began accusing other countries of stealing ideas, the U.S. government encouraged intellectual piracy to catch up with England’s technological advances. According to historian Doron Ben-Atar, in his book, Trade Secrets, “the United States emerged as the world's industrial leader by illicitly appropriating mechanical and scientific innovations from Europe.” 2.Among those sniffing out innovations across the Atlantic was Harvard graduate and Boston merchant, Francis Cabot Lowell. As the War of 1812 raged on, Lowell set sail from Great Britain in possession of the enemy’s most precious commercial secret. He carried with him pirated plans for Edmund Cartwright’s power loom, which had made Great Britain the world’s leading industrial power. 3. The fledgling country, however, lacked a domestic textile manufacturing industry and lagged far behind Great Britain. The quickest way to close the technological gap between the United States and its former motherland was not to develop designs from scratch—but to steal them. In his 1791 “Report on Manufactures,” Hamilton advocated rewarding those bringing “improvements and secrets of extraordinary value” into the country. Among those who took great interest in Hamilton’s treatise was Thomas Attwood Digges, one of several American industrial spies who prowled the British Isles in the late 18th and early 19th centuries in search of not just cutting-edge technologies but skilled workers who could operate and maintain those machines. Exactly whats happening to semiconductor talent now: 4. In order to protect its economic supremacy, the British government banned the export of textile machinery and the emigration of cotton, mohair and linen workers who operated them. A 1796 pamphlet printed in London warned of “agents hovering like birds of prey on the banks of the Thames, eager in their search for such artisans, mechanics, husbandmen and laborers, as are inclinable to direct their course to America.” Patents: Under the Patent Act of 1793, the United States granted dubious patents to Americans who had pirated technology from other countries at the same time that it barred foreign inventors from receiving patents. “America thus became, by national policy and legislative act, the world’s premier legal sanctuary for industrial pirates,” writes Pat Choate in his book Hot Property: The Stealing of Ideas in an Age of Globalization. “Any American could bring a foreign innovation to the United States and commercialize the idea, all with total legal immunity.” The spinning water wheels of American textile mills—and the stolen secrets upon which they were built—propelled the United States forward and quickly transformed it into one of the world’s leading industrial powers.

Whats also interesting, the US complains about human rights abuses, especially about the Uyghurs but they themselves tortured Uyghurs in Guantanamo for years on end...and regarding patent theft, the US is not particularly unguilty... https://www.history.com/news/industrial-revolution-spies-europe

1. Europe must reduce its dependency on the United States and avoid getting dragged into a confrontation between China and the U.S. over Taiwan, French President Emmanuel Macron said in an interview on his plane back from a three-day state visit to China. 2. He said “the great risk” Europe faces is that it “gets caught up in crises that are not ours, which prevents it from building its strategic autonomy,” while flying from Beijing to Guangzhou, in southern China, aboard COTAM Unité, France’s Air Force One. 3. Macron also argued that Europe had increased its dependency on the U.S. for weapons and energy and must now focus on boosting European defense industries. He also suggested Europe should reduce its dependence on the “extraterritoriality of the U.S. dollar,” a key policy objective of both Moscow and Beijing. “If the tensions between the two superpowers heat up … we won’t have the time nor the resources to finance our strategic autonomy and we will become vassals,” he said. Russia, China, Iran and other countries have been hit by U.S. sanctions in recent years that are based on denying access to the dominant dollar-denominated global financial system. Some in Europe have complained about “weaponization” of the dollar by Washington, which forces European companies to give up business and cut ties with third countries or face crippling secondary sanctions.

Its okay for the US to have belt and road initiatives all around the world, building military bases in the pacific but when china does it its very dangerous and we all have to work together to stop them...Macron sees it the right way: https://www.politico.eu/article/emmanuel-macron-china-america-pressure-interview/

Is that actually so, its not like you cant make a living as a software engineer in china...

Its obvious that the current economic powers are anxious and desperate and try to bully china as much as they can. ,,Disrupt our business communities and financial industries,, also tells you what this is about $$$$.

Really worrying tone for a congress member. https://www.congress.gov/member/mike-gallagher/G000579 ,,The CCP is the enemy of freedom,, ,,belt and road initiative dangerous,, ,,global competition and ideological competition,, ,,not allowing the CCP to coerce our business community, financial industry,, ,,get on the same page to push back against the CCP,, Some americans see it like this fellow: Its okay for china to exist as long as they do exactly what the US wants from them. As long as the US can install a government that adheres to their needs and wants. The belt and road initiative is called ,,dangerous,, but Apple can operate sweatshops in China where workers suicide themselves regularly...

Completely exited Micron, Samsung, Amazon and proceeds went into FFH and Exor

Yeah id say thats right, although the degree of protection is debatable. And thats they key, finding the right balance. China will just do what helps them to become a superpower and prosperous, they sometimes will face a wall but the goals are pretty clear and the work ethic is high. This is a good example of the economic war dynamics: https://innovationorigins.com/en/chinese-export-ban-on-asml-is-shortsighted-hypocritical-and-counterproductive/ The recent extension of the export ban on ASML only came about because of enormous pressure from the US. That the Netherlands agreed to it is hypocritical for three reasons. First, China still has plenty of room to continue building military equipment. Most of the chip technology used for military purposes comes from machines of a previous generation. These may still be sold to China. But there is more: a big difference between selling chip machines (banned!) and the chips themselves (allowed!). Believe it or not, the most advanced chips made with banned machines can still be sold to Chinese companies. They then come from Taiwan or even the U.S. The U.S. market authorities have no problem with that. American Business benefits a lot by these rather arbitrary export bans, not exactly promoting competition. What would be the effect ot these bans: Because if we, even from eight thousand kilometers away, have come to see one aspect of China very clearly, it must be its immense research and development power. Nowhere more universities, nowhere more engineering graduates, nowhere more government money pumped into technology. Combine that with its great ability to copy (ASML knows all about it), and you know this country won’t leave any moment unused. Short-sighted, hypocritical, and counterproductive, that’s what it is. And if there are any positive effects, they are short-term at best. Why has it come to this? Because the European strategic autonomy, so fervently propagated, is still a sham. Because we fear losing the U.S. if yet another European country is compromised. Because Washington and not Brussels or The Hague determines the line of march. The export ban on ASML proves that a position on the world stage on the same level as China and the United States is not yet reserved for Europe.

Will read the article later @UK But just looking at this massive front picture: Its clear which message the WSJ wants to send here, Xi Jinping reminding of Hitler on that picture, 8 anonymous guys in black standing in a room in front of the picture, as if it would be a secret conspiratory meeting against the peaceful west...its difficult to have a neutral view on china also because of the massive western media that just prints out more and more catastrophic articles (viewers seem to like it). China is a communist country and our enemy!!

I think ANY competitive advantage would be a stretch @Spekulatius but yeah, GDP and productivity growth comes before all-time high SP 500 profit margins, innovation and investment before buybacks and dividends, question is where will china and their economy stand longterm versus western countries, i could easily imagine china being the dominant player in many more fields in the future. The trade wars are just one of these signs of possible disruption from china and western anxiety of economic shifts. And except the rich western economies, many are happy to do business with the chinese (which also look out to have satisfied customers). Heck france even started leaning out more to china in macrons recent visit. @Dinar Thank you for sharing, no its not a joke. One can spend hours over hours on doomscrolling why China will collapse or why the US will collapse, or why there will be a third world war. Just look at what china created the last 20 years, look at how many countries have china as their biggest trading partner. Then the pace of innovation and development in the coastal area. This talk of ,,everybody is leaving china,, ,,they have huge water problems,, ,,the birthrate is dropping,, is just temporary noise for the most part. The long term trend line looks impressive.

That said, we never had the size of some businesses today ever in our history (outside of the dutch east india company perhaps) and they were a brutal monopoly that crushed countries, workers and made profits for a nieche aristocracy. Arguably good for the shareholders back then (until it crumbled due to corruption, adminstrative issues). Remains to be seen what the regulative side in the US will do to some mega caps.

If i would bet on a society and economy that will be world leading in a decade id bet on china, as problematic some things are. Owning a strong business that is playing both in china and globally is still a really good position.

Well, i think there is a pendulum to be found between monopolies and competition and the pendulum in china is shifting and they will plan to shift it even more. I think it will be much harder for many businesses than it is the case in the US. One could argue that is the reason why the SP 500 has higher margins, higher returns etc. On the other side i think one can make the case that general growth and inventiveness will lead to a more prosperous economy in total. I think strong and well managed businesses like Tencent or Alibaba, even regulated, will be good plays although they wont have it as easy. But combine it with the possible growth of the chinese economy and i think the picture looks much better. Its a bit in the too hard pile since we cant know how the CCP thinks about specific businesses but they also wont get rid of capitalism. I mean US has their own anti trust but its far weaker than in china, as we see in the markets reaction.

I also want to stress again that in china, contrary to what some may hear on the media, the competition in many sectors is incredibly brutal. China and the US have state capitalistic systems with one important more and more shifting difference: China is PRO market and the US and most of europe PRO Business. In a recent interview of the economist of the book i linked, she talked about how much competition by business there is just for simple daily use products and also how hard the economic existence for many people working in factories is. Common Prosperity should be understood as a pro market move because thats where consumers will win. No common prosperity and huge monopolies with concentrated rich owners, business with high pricing power, is the other side of the coin, pro business policies and an unregulated market. Taking the severe cuts into freedom of speech etc out of the picture, the CCPs goal is not to harm and milk out their citizens (as it is more the case in russia) but that china will become a flourishing modern developed socialist country: "prosperous, strong, democratic, culturally advanced, harmonious and beautiful" as said. What role will shareholders and business play here? Shareholders wont be treated as they are in the US. Regulation will be tougher and more unpredictable, possible tax and redistributions could happen. But that wont mean a return to a completely planned economy and starving for many. The chinese dont care which economist said what, they dont care what exact form of capitalism is the best according to the west, the system has to produce the above said results. They will never achieve that without markets, without investments, without shareholder returns. As long as one buys very strong and well managed businesses there will be returns made, possibly great returns. China is also trying desperatly to get around western patent rights IMO because they see it as ANTI Market. The more competition, the more innovation and the better their developments and GDP growth will become. It will also mean a much higher competitive environment than in the current western market.

1: Why cant Ukraine join Nato? ,,What would happen if mexico would join a chinese run international military alliance where heavy weapons are send to mexico with interoperability of chinese and mexican military systems, what would happen to mexico? They would be blown away´´ 2: Do you see an equivalance between nato and russia and china? ,,No, Nato is a much more agressive military alliance, nato has invaded Yugoslavia, libya, Ukraine, backed up the invasion in afghanistan, everybody outside of the west can see it but in the west you are not allowed to think it,, ,,Global south collapsing in ridicule, india, indonesia, south africa,,

Yeah...i added heavily after latest earnings...

Reduced my Micron Position at 10% Gain to add to Fairfax

0 fees, FFH bought over Gettex Munich

Sold half of my Samsung Position at a 5% loss and shifted proceeds into fairfax and left with some cash to deploy.