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China - What are you doing about it?


tlee19802

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Thanks Vinod, this was good. So slow painful adjustments to a more consumer centric model with some de-leveraging along the way and better quality in business/financial practices through reforms but no total collapse right? That seems to be the most probable outcome.

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Short blog entry about China's debt expansion:

 

http://houseofdebt.org/2014/03/13/china-and-the-dangers-of-debt.html

 

That was good. 

 

First, the Western world put them on an unsustainable growth path fueled by our debt bubble in the US and elsewhere that boosted unsustainable consumption of Chinese exports.

 

Second, when that blew up China has tried to maintain that growth trajectory using unsustainable domestic credit growth rate.

 

So what happens next?

 

Either IWM tanks or gold goes through the roof or some combination of both over time.

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This is a great discussion but I would love to hear answers to the original question....what is everyone doing about it? And how can protection be structured so it works out regardless of wether an event in China happens Monday at 1am, in a couple years, or spring 2019.

 

We might have different opinions about the issue but I think we can all agree that it is a known risk. I already mentioned I bought long term puts on iron ore miners. I expect to lose the premium and buy more in a couple years.

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i am not doing any sort of puts or shorts... but rather been thinking about how when the market crashes what I should be buying --

Gary

Clear media, traded in hong kong.

 

I would for sure keep this on your watch list. It is advertising , but they have a very nice moat in a business that will probably always be necessairy. Usually advertising is hit really hard in a crisis. Plus I think this is one of the few really ethical hong kong traded companies where risk of being ripped of as a western investor is really low. It is fairly valued now tho.

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In the ALS.TO thread Dazel posted a link (http://www.bloomberg.com/news/2014-03-16/china-plans-over-163-billion-shantytown-investment-cctv-says.html), and it got me thinking -- because China is a communist country, it has the ability to wield fiscal policy much easier than the US. I don't know exactly what that means or how it will play out over there, but it's likely to be different than what is expected from similar issues happening over here. I don't want to sing communist praises, but having both fiscal and monetary options on the table will make for a much softer landing in a crisis.

 

I feel more uneasy making macro guesses than I do having my money in very undervalued businesses. Given I've got time on my side (I'm in my mid-30's), I'm just going to stick it out and do nothing. My money is in a few undervalued businesses, so if/when the market takes a drop, my companies will rise back up with it -- that's what I'm doing about China.

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