[China]

2 hours ago, Hektor said:

 

Pay cuts! Sound like what happens in a capitalist system.

 

"her husband’s salary and bonus as a bank worker were slashed in half over the past two years"

 

"After her husband’s pay at a tech company was cut last year, quitting piano seemed the obvious choice."

Probably related to this article on Bloomberg..

 

https://www.bloomberg.com/news/articles/2024-02-26/xi-crackdown-on-hedonistic-bankers-fuels-industry-brain-drain

[China]

https://www.bloomberg.com/news/features/2024-02-28/piano-sales-fall-in-china-amid-stock-rout-real-estate-bust

Middle class taking quite a hit.

[China]

The challenge is that there’s no real way of pricing the political implications especially if things so south.

 

There’s a range of possible outcomes for investors, and using history as a guide, the downside scenarios are pretty dire.

 

The allure of “cheap valuations” is what attracts many investors to Asia.. but as someone whose lived here and seen the same story play out again and again, I would be more cautious.

[China]

Was reading The Investor Manifesto by Bernstein (published in 2009) and came across this
 

“Similarly, brokerage houses and mutual fund companies often tout the stocks of emerging-market nations, such as Brazil, Russia, India, and China (the so-called BRIC countries) because of their rapid economic growth.

But beware: Share dilution, and often outright theft because of lax security  laws, vaporizes a lot of this growth by the time it reaches the per-share level.

 

For example, China’s economy has been growing at a blistering 9 percent real rate per year for more than two decades. Yet between 1993 and 2008 investors actually lost 3.3 percent per year in Chinese stocks, even with dividends reinvested.

You read that right: Over this 16-year period, even before expenses, the investor in Chinese stocks lost 41.5 percent of value. (The loss of 3.3 percent per year before inflation calculates out to a loss of 5.7 percent per year after inflation.)”

 

[China]

14 minutes ago, Luca said:

There was so much money made in china since their industrial revolution started, this is just not true man! 

That’s my point.

 

The legal system is the same and depending on the decade you are in, you had very different final outcomes in your wealth ranging from extreme wealth to confiscation or imprisonment.

 

There’s a reason why there’s such a huge industry (and penalties in place to prevent it) helping move wealth out as a “backup”.

[China]

23 minutes ago, Luca said:

The country did a 180 from back then, why continue to blame todays government for things almost 70 years ago. What is the new direction? Where are they heading? I dont see different goals for china compared to 5 years ago. The geopolitical mood changed and Xi has a tighter grip over the country. What fundamentally changed with China that was not obvious 3 years ago when Alibaba made ATHs?

I am not sure if you’ve kept up to date but a lot has changed in the last 3 years and the new direction seem a lot like the old policies which didn’t work and led them to the situation 70 years ago.

[China]

That’s the real challenge - the lack of check and balances creates a feast or famine type situation.

 

Dependint on time period you were where the CCP was in charge, you either did really well or had your assets confiscated and were sent to the countryside.

On a side note, the returns or Chinese equities has been horrific in the last 3 decades too.

 

But at least you got to keep it..

 

[China]

38 minutes ago, Luca said:

Making todays members of the chinese government responsible for the deaths back then is the same as making the current german government guilty for starting WW2 and killing jews. Doesnt make any sense at all!

The people are different but the governmental structure and system is similar. 

 

There’s been a clear shift in the the last few years that have undone many of the policies that were set in place that enabled China to unleash its potential starting from the 80s.

 

I want China to do well - but the new direction it’s heading is extremely concerning. 

[China]

1 hour ago, Luca said:

So i am seeing the negative headlines to continue while over the coming years their economy stabilizes and growth continues. The investments will continue, the huge part of the still poor population in china will get lifted out of poverty with competent financial moves by the CCP (that can regulate like no other state), and china will look better and stronger 10 years down the road. There will be more people taking part in their digital economy, benefitting the smart management of Tencent that knows china inside out. Geopolitics will change too over time, the leaders of today are all 70 years+, if one is willing to own these ownership mindset largecaps like tencent for the next 15 years, even better via prosus due to buybacks and discount. I think the probability is a lot higher we will make a lot of money here than not. 

Didn’t the CCP put them into poverty in the first place?