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ANP301191

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  1. @SharperDingaan - Appreciate the commentary, but as someone who is from the "next generation" most of the people I know also dont understand the crypto space beyond it being cool and its going up so buy it. I can still understand utility NFTs - I can understand why someone is willing to pay 500 USD (or whatever ETH that is today) for the next generation machine gun on COD (I dont think I would do it but sure there is a business proposition here). Someone has added value to you/your experience, and you have paid them for that added value. The fact that it is rare probably adds a little more juice to value. But why an Ape is worth 500K will never make sense to me. I similarly dont understand why a Picasso is worth x million USD. But again, granted there is a business proposition of sorts here as well there are only so many of these items, if you have one that means that there are less on the market, and so people have to pay more for it. And yet someone has to explain to me why a dogecoin is worth what its worth beyond the greater fool theory. Even in the businesses that do accept crypto (not the illegal ones but the legit ones) they pay their employees in USD in the most part, they pay their vendors in USD or fiat on the most part. All they are doing is accepting huge currency risk for the marketing of being "tech friendly". Again just an average (or below average) investor, but doesnt seem to make sense to me. Additionally, there have been numerous reports about the risk of a 51% attack on BTC with a very small number of miners and wallet holders owning/controlling the coin. While I am not the biggest fan of national governments, I usually know who they are and who makes the calls, and I can put that into a risk calculation. In this case I have no idea who they are and no idea what their game plan is. Full disclosure, I bought some BTC and ETH earlier this year, up nearly 80% on both of them, but I wrote off that part of my portfolio the minute I did. The refrain from the crypto-bulls of "this time it is different" is pretty similar to the geniuses who came up with the MBSs of early 2000s or the dot-com guys in the late 1990s or any other such bubble. Not denying that there is a great utility for the product (just like there is a use-case for MBSs and obviously for internet businesses) - and specifically the NFTs which I am sure will be a large part of future business infrastructures and way to market - but that doesnt mean that the market is not in a bubble and that this bubble popping will not lead to a financial squeeze amongst other asset classes. Just following on with @Parsad's point, when the 2.7T reduces in value, even by say 50%, the repercussions are not going to be just the 1.35T that disappears, because people are loaning on crypto and staking crypto. And the fact that we have large financial institutions like mutual funds and payment processing companies having crypto on their books is a dereliction of fiduciary duty by those managers, because there are no risk management tools invented yet for crypto. No one knows the true volatility in a down market, no one knows the liquidity when the market starts to cascade, there is no historical evidence, there are no options traded by large scale banks that the Fed will bail out. So again, yes, by all means I think it should be 100% legal to invest in crypto, just like it is legal to go to vegas and put money on the roulette table, but just like that roulette table, lets not make it a "business model" or something with intrinsic value, it is a gamble (a fun one and one thats going well for me at the moment). And lets not say that having it permeate our financial infrastructure is not dangerous.
  2. 1) Generally the rising case of "consumerism" in India added with the lower rate of financing of any long-term purchase (home/car/etc.) versus inflation/sd means that people will buying a ton of cars in India at least amongst the middle classes. As a side point, I genuinely believe that the Indian middle class will come out of the pandemic with a huge pent up demand as most people in the services businesses saw wages jump over the past two years and no one was spending on anything other than the bare essentials. 2) Green-ifying indian infrastructure - Tata Motors is one of several companies working with local and state governments to add greener buses/build up the green infrastructure to support the EVs. 3) Management - there are a few companies working on the green-tech side of the Indian infrastructure business, but I trust Tata more than them all. Granted Tata Motors has been a blackhole of money since they went around the world buying assets (definitely not a fan of their purchase of the Range Rover purchase), but at least they tell you when they burn cash, other Indian companies find very interesting ways of hiding it on the balance sheet. Additionally, management seems to have realized that their competitive advantage is India, and being one of the best automotive businesses in India is probably going to be sufficient in the next decade - a lot of their recent investment (purchasing Ford's factories in India earlier last month) are in India. Do think that you should have a very, very strong view on growth in India to buy it at these prices though, seems a bit euphoric if you look at the charts. My last purchase was like a 5% top up of my position and was less than 0.5% of my portfolio, the large part of my position was built in around the 350INR price for full transparency.
  3. Added to AMZN, TTM (Tata Motors ADR) today
  4. Added some FB in the mid 320s. Maybe Im wrong but I would love the US govt to break it up, Whatsapp and Instagram are probably amongst the most valuable properties in the world and are definitely undervalued being part of the FB "evil empire".
  5. Same boat - though I was thinking whether forums like this and other "value" based investors that I speak to may have made me prone to confirmation bias???
  6. Picked up some MHO/MTH on the sell off Tuesday. Double edge sword of higher interest rates leading to higher mortgage costs and higher costs eating into margins. But I think their land value is probably increased by a good mid-teens % over the past year/18 months, and I think WFH/housing requirements remain post-covid.
  7. +1 to @Parsad comments - this time the crackdown feels different. I believe the Fed and the ECB (add any other central bank) will eventually launch their own digital currencies, much like what has happened in China a few months ago. The blockchain aspect and the businesses that have really built some value add will remain useful, but some of the prices that people are paying for NFTs and "digital" real estate does seem awfully bubbly.
  8. While I agree with all the comments made in this article - thanks @UK for bringing to the top of my reading list - I think where the author makes a mistake is thinking China is a "western" or "democratic" country. The Chinese state has levers of power that no government in the West could/would dream of. In terms of reducing demand for property, it could be done by dictat - perhaps a "one house per person" rule or something of the same. Additionally, there is no large corporation in China that isnt swayed significantly by the state, whether that is the local government or central government. While the internal tensions between states and the center will be interesting, the local governments requiring land sales to meet their budgetary needs, I doubt very much that Mr. Xi doesnt come out on top. The examples of the tutoring business, the various tech businesses, the gaming businesses come to mind. If the Central government thinks that some activity is a net negative to the population or the Party, they will bring down enormous power and enforce large corrective actions. I think we are seeing a part of that today with Evergrande and I doubt that it will be a unique scenario in the near future. What will be really interesting is how the supply economies to China do in the scenario where China slows down. Australia may have a robust economy, but it is heavily dependent on mining and materials. Chile exports to China account for something like 32% of its GDP. South Africa is north of 10% of its GDP, and these are just countries that I follow due to having large exposure (as a % of my portfolio). I am sure you could rattle off a list of Central Asian and African countries who will be heavily dependent on Chinese manufacturing and construction growth, what happens when China is no longer the worlds factory and is no longer building thousands of homes for fun. Raw materials required for manufacturing will still get sold but at what price? And the inflation caused by rising wages in China probably will be acerbated by the lack of efficiencies in production elsewhere. At some point, the Chinese consumer will demand more and more goods as well, what happens when that additional demand gets added into an already changing supply pipeline. Its going to be a very interesting few years!
  9. Picked up some AMZN, BRK.B, GOOGL and XLF during the day. Started a new position in Nippon Electric Glass.
  10. Having visited Shenzhen/Guangzhou and Shanghai often for work, I also want to give credence to @Spekulatius point. Literally everyone wants to be a property owner, so much so that they often take loans from their employers to put down down-payments for buildings which have just been approved but the ground hasnt been dug yet. A lot of this comes from the fact that over the past 15-20 years, a ton of wealth in the middle class has been created by the rapid increase in the price of their homes, so people see this as a way of getting on in life. Another part of this is that the credit system in China is only recently being liberalized, so using a mortgage was one of the easiest ways for people to borrow money. Anecdotally, I dont remember many people having credit cards and when I was looking into $V and $MA I found that the penetration is less than 50% last year (43% in 2019). I dont recall any large free buildings in my visits but I do know that at various points in the past decade, the rental income was not covering the mortgage payments, so without price appreciation you were pretty much stuffed. As far as the Evergrande unravelling is concerned, I think this provides a much needed opportunity for the CCP and Xi to step in and clean up a lot of the debt that has been run up by developers. I am sure investors and bondholders will be left out in the cold, but following on from a lot of the comments in the "Dont Fight the CCP" thread, maybe that is what the CCP wants. The easiest way for them to deflate the home building bubble without blowing up peoples investments in their own homes is to push investors out of the market. If no one lends/invests in a developer, automatically less supply of homes, which supports the price of homes. Additionally, it takes some of the burden off the government to keep selling huge pieces of land to keep the market saturated. And I can also see the government limiting the number of investment homes people can own or increasing the cost of mortgages to cool the housing speculation.
  11. Coming at it from another angle, a few of my friends in the Midwest have been looking to hire (fast food franchisees - college towns) and even after increasing the hourly by 3-4$ are unable to to attract even 50% of the applicants that they usually would get when Universities would start again. The general sentiment seems to be that people dont want to take the risk of getting covid while working a part-time job and studying. Additionally, as @KJP suggested the US seems to be near full employment, in terms of whomever wants to work can find a job, and it is probably going to require an increase in salaries to coax new workers into the workforce again.
  12. I agree with the sentiment, but I would have thought part of China's growth would be to become the tech "powerhouse" of the world, so beating on the tech businesses, who along with all the consumer tech stuff that they do, are investing in all the industrial tech that China wants to be at the forefront of seems rather counter-productive. Coming very close to that same opinion but I find it hard to discount a market which is something like 20% of the worlds population/second biggest economy etc. I also appreciate that there are thousands if not tens of thousands of businesses that are traded actively as @Gregmal suggested, but still find it difficult to discount China's impact on any stock. For example, the copper price earlier this year rose in tandem with the Chinese manufacturing numbers. I am sure that a lot of the other base metals will have similar stories. I would argue that a lot of consumer goods stocks in the large cap space have a large exposure to China (Nike, Apple, etc.). While the argument made above by @Spooky that you wouldnt get completely wiped out as a Apple shareholder if you were to take out Chinese sales, not only does the stock then become extremely expensive but growth projections will crater as well. Maybe investing in a Chinese equity isnt a suitable solution, but just looking at my current portfolio of non-chinese names, over 50% are extremely exposed to China, and most of them are pinning growth projections based on the Chinese consumer.
  13. Following the recent up and downs of Chinese tech/education/housing etc. stocks, how does one tackle the challenge of investing in China? Cards on the table - Im in my early 30s so pretty okay with some risk also looking to grow capital over a long period of time. Additionally, I am a large proponent that the next 20-30 years of economic growth/development is going to come from the "East" and China as the worlds second largest economy (soon to be the largest) will probably play a massive role in that growth. Yet whenever I try to underwrite an investment in China in recent months, I find it difficult to comprehensively understand the political risk that the CCP may decide that the business/segment/industry goes against the needs/requirements of the government/people of China. How would one go about understanding and investing in China when so many of its largest and most prominent companies seem to be on the government's radar for infractions of some sort? Additionally, does one invest in China at all, or take strategic bets on "Western" companies with large exposure to China (i.e. Nike). Any advice/opinions would be helpful.
  14. Tried it last night, it was such a mess that I gave up an hour in. Maybe I messed up something somewhere :S
  15. @formthirteen you made my week, I have it on repeat
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