Political Posts

[WayWardCloud]

How about this bad boy?

https://www.ishares.com/us/products/239659/ishares-msci-india-etf

 

[thowed]

If you can't access individual stocks, then there are some excellent Indian & Chinese active funds, but the best ones tend to be under the radar.  Also I know the UK/European market & have little knowledge about the US mutual fund scene.

 

First Sentier have some US presence, have a ton of experience in China and India, great long-term track records and have an excellent radar for dodgy governance.  The flipside is that this quality focus means they tend to underperform in raging bull markets, but then outperform in bear markets.

 

I think China and India are both fascinating and exciting markets to be invested in, but they both have their individual issues.

 

 

 

[Luke]

7 hours ago, Castanza said:

Country level success above all. Very much an "organism" mindset vs individual. 

Strong family values and work ethic remind me of the US post WWII. This is very much a predictor of country success. 

Country success =/= shareholder success to Parsad's point

 

Two simple docs that capture the amazing feats and accomplishments of China along with the ugly side of China. The second one shows the Urban Village issues and the emphasis on growth at all costs. @Luca thanks for the above interviews. 

 

 

 

 

Country success goes over individual shareholder success, to a degree yes. But China understands they cant grow alone so i think that this incredible disregarding of investing in china and the ,,china is uninvestable,, is just false. Growth at all cost is what brings this country forward, not billions in dividends that go to few billionaire shareholders but real growth for common working people.   

6 hours ago, Spekulatius said:

The growth in China has been there, but for shareholders China has been a dud and there are many reasons why. high GDP growth does not mean good shareholder returns.

 

 

 

This story of zero profits is also just false, valuations in china are partly ridiculously cheap, if these come up bar with the US the returns are very decent. And many businesses had stellar returns. High GDP growth will mean good shareholder returns, as long as those businesses dont become predatory!

 

5 hours ago, Castanza said:

Question for those in the know. How is the shareholder treatment different between China and India? Is India much more favorable? 

The individual businesses treat shareholders similiar to US, just look at tencent, there is no difference with dividends buybacks and culture. Whats different is the willingness of the government to regulate and also their ability to regulate. In the US many businesses can engage in predatory practices, pay ridiculous wages to people, abuse them, shatter unions, bought politicians that harm the majority of working people. In China there is from one night to the other immediate action and tough regulation, the american shareholder then comes with ,,socialism,, and ,,no shareholder rights,,. I dont think its true and many regulations are very smart. 

5 hours ago, Saluki said:

 

I own some BABA and have been raked over the coals by the Chinese government, so I'm more comfortable now with India (Fairfax India) Korea (Coupang) or Mexico (Televisa) going forward.  When Jim Rogers mentioned his bullishness on China, he analogized it to the US in the early 1800s.  If you had invested in the US you were buying into the incredible growth. It was lumpy and you had a civil war, the great depression, a genocide of the Indians, several wars with other countries, numerous presidents assassinated, the bankruptcy of the railroads, corrupt politicians and judges, but it was so good that being directionally correct was enough. But I've soured on that outlook because even if he is right, I don't have 200 years to ride out that volatility and if the legal institutions and respect for property rights isn't there, will my ADRs be worth anything to my grandchildren?  If you were a British merchant and had invested in NY Gas Light Company in 1824 and left the shares in a safe that was hidden, when your descendants came upon the shares almost 200 years later, they would be entitled to the shares in ConEd and all the uncashed dividends along the way.  I don't think anyone believes they wouldn't get every penny of it. 

 

As a country with a strong central government that does what it wants, even if it overrides people's rights, it can move quickly and get things done.  But what are the odds that Xi's successors will always act in a way that benefits China and not themselves. A powerful central government only needs one autocratic leader who won't step down to turn it into a dictatorship. The Chinese people have never had a democracy, so would they even notice if the power grab was inch by inch instead of all at once? Maybe a war with Taiwan is what they want to rally everyone behind the rulers and jail anyone who opposes them?  Who knows?  

 

I feel fairly confident that in India you get some of that Asia growth story and some of that Commonwealth legal system respect for property rights that has benefited most of their former colonies (US, Canada, Australia, NZ).  

 

 

If you bought shares in tencent 15 years ago, the story will be the same and also for the future. The only difference is again, the governments ability to regulate markets for the good of the economy. In China practices like FORCED yearly increased wages of 15% in several coastal provinces made many businesses move to the countryside for cheaper labour. The government can pull levers to grow underdeveloped parts much more than the US. They CCP administration has smart people sitting there looking at the US, what works and what doesnt work and then they can immediately start implementing without needing votes and all of that. It gives them an edge, especially in long term planning. China is already a dictatorship and authoritarian, doesnt necessarily have to be bad as long as the leader organizes that his people are taken care off so they dont revolt. The CCP knows this very well and Xi JinPing is someone who takes common prosperity to the heart IMO. 

4 hours ago, Castanza said:

Thanks Saluki, that makes a lot of sense and I tend to agree. China's growth is highly impressive but the lack of property rights and ability to actually truly own anything is a glaring issue. The lack of justice in the judicial system is a tough one. Could be the same in India tbh I don't know. Overall, this has been my main issue with investing in China and why I don't have any positions in Chinese equities. I think the growth story of China continues, but how to profit from that while minimizing risk? Not sure. Tough to balance western bias and the realities of the Chinese political/economical system. Both have a lot of propaganda. 

 

India on the other hand seems a lot more open to western influence. They seem less corrupt from the top down and seem to strike some semblance of middle ground between autocratic and democratic. They seem more open to the outside world where China like to dominate from the inside out. With the insights from Prem and Fairfax I agree that there are some good vehicles for exposure to the Indian economy. 

Is it likely that tencent, JD, Baidu will be businesses that will be better and worth more in 10-20 years. Look at how much china can grow their country. 1.5b people, a government willing to growt the economy as hard as they can, pulling levers in countries all along asia, africa, europe. They invest where they can, and they invest very well. Its a no brainer for me to include some of these names at reasonable position sizes. Guy Spier has Baba and Prosus, Pabrai has Prosus, Munger has Tencent and Baba, there will be many more who own these assets for a reason. 

4 hours ago, tnp20 said:

It doesnt have to be either or. Both India and China will do well until China's demographics start being a major headwind. The losers will be Europe, Japan and US. China has such a huge lead in EV's ...the German and Japanese auto idustry is on the back foot as they havent pivotted fast enough from ICE. China's demographic issues are starting but the likely pinching impact is not likely to be felt for a decade or so.

 

From a demographics point of view India, Brazil and Indonesia have strong tail wind. China is in unique situation where they are starting to have demographic issues but other factor will carry it forward for at least the forseeable future.

 

I am invested in China but also excited about India. They have the India stack of technology, and massive self sustaining investment in infrastructure. They are liberalizing tax, business rules, divesting and reforming the legal system. The last part has just begun is likely a multi-decade affair. The government is exiting the areas it should not be (divestments, unnecessary labor laws) and finally stepping up in the areas it should act (infrastructure, legal system). India seems to be in a self sustaining cycle. I have not been back to india in many decades but from what I have seen and heard, the progress is remarkable and there is incredible optimism in the population and business leaders - they see an achievable goal to be a developed country by 2047. Lot of things are now positively reinforcing themselves and US see India more in its side than China which will give it additional benefit.

 

China is indeed at the mercy of Xi. This single point has hurt the stock holders over last few years, but I think its premature to rule out the chinese market at least for the next 5-10 years.

 

 

India is great, China is great, they will both be bigger economies with more and more influences in the future! 

 

 

 

Edited April 4, 2023 by Luca

[Spekulatius]

After doing 5 min of in depth due diligence, this one seems interesting:

https://fundresearch.fidelity.com/mutual-funds/summary/936793827

 

High expense ratio though (1.51%). 

[adesigar]

My issue with investing in India is the currency keeps losing value almost as fast as the stocks keep going up.  Sensex went from 20k to 60k in the last 15 years. Currency went from 1 USD = 40 Rs to 1 USD = 80 Rs. 

[james22]

The Russian Military Is Destroying Itself In Ukraine

 

The British Military Intelligence has assessed that “a significant minority” of Russian casualties in Ukraine have been caused “due to non-combat causes. 

 

Non-combat deaths are normal on a battlefield. But Russian Telegram news channels report “extremely high” numbers of deaths linked to alcohol consumption and crime.

 

“Other leading causes of non-combat casualties likely include poor weapon handing drills, road traffic accidents and climatic injuries such as hypothermia. Russian commanders likely identify pervasive alcohol abuse as particularly detrimental to combat effectiveness,” the British Military Intelligence assessed in its latest estimate on the war.

 

Although completely foreign to Western professional miliary forces, alcohol consumption is an integral part of Russian culture, especially Russian military culture. 

 

“However, with heavy drinking pervasive across much of Russian society, it has long been seen as a tacitly accepted part of military life, even on combat operations,” the British Military Intelligence added.

 

https://www.19fortyfive.com/2023/04/putins-disaster-the-russian-military-is-destroying-itself-in-ukraine/

 

LOL

Edited April 4, 2023 by james22

[rohitc99]

58 minutes ago, adesigar said:

My issue with investing in India is the currency keeps losing value almost as fast as the stocks keep going up.  Sensex went from 20k to 60k in the last 15 years. Currency went from 1 USD = 40 Rs to 1 USD = 80 Rs. 

You will have to look beyond the sensex. 5 companies - reliance, HDFC group, infosys, and icici bank account for 40%+ of it.

[rohitc99]

1 hour ago, adesigar said:

My issue with investing in India is the currency keeps losing value almost as fast as the stocks keep going up.  Sensex went from 20k to 60k in the last 15 years. Currency went from 1 USD = 40 Rs to 1 USD = 80 Rs. 

Also you have to assume an average of 3-4% depreciation on the currency on average. Its a unstated policy to continously depreciate the currency to boost exports. After the payments crisis in early 90s, the govt would never want that to happen

[Parsad]

2 hours ago, Luca said:

 

India is great, China is great, they will both be bigger economies with more and more influences in the future! 

 

 

After visiting China in 2015 and India in 2019, what I've been saying ever since then is that the Western world better hope that China and India don't find a way of putting aside their border issues and historical disdain for each other.  Because if they ever put a free-trade agreement into place and worked together with the rest of the Asian region, it would dramatically tilt global economic, political and military power!

 

The manpower, brainpower and capital available would dwarf any other free-trade market!  You would then have a serious challenge to the USD.  Thankfully, it is very unlikely that will ever happen.  India and China have a hard enough time keeping their own jurisdictions in line, they would not be able to take a stiff arm approach to other countries like that.  Cheers!

[sleepydragon]

In Chinese history, it’s always preached “near are enemies, remote are friends”. For countries near China’ s boarder, they are always seen has long term threat. Sometime this threat is managed through gifts. My point is, China and Russia will have war again.  Beijing is so close to the Russian border, it can be taken within weeks by Russian tanks. The biggest threats of CCP’s ruling is not America which is far away, but an aggressive Russia.

 

[Castanza]

6 minutes ago, sleepydragon said:

In Chinese history, it’s always preached “near are enemies, remote are friends”. For countries near China’ s boarder, they are always seen has long term threat. Sometime this threat is managed through gifts. My point is, China and Russia will have war again.  Beijing is so close to the Russian border, it can be taken within weeks by Russian tanks. The biggest threats of CCP’s ruling is not America which is far away, but an aggressive Russia.

 

Isn’t China trying to work with Russia on belt and road policy? Something tells me after this Ukraine war is over, the long arm of China will step in and help with Russias recovery. They seem to have a knack for stepping into distressed situations as of late. 

[mcliu]

24 minutes ago, sleepydragon said:

In Chinese history, it’s always preached “near are enemies, remote are friends”. For countries near China’ s boarder, they are always seen has long term threat. Sometime this threat is managed through gifts. My point is, China and Russia will have war again.  Beijing is so close to the Russian border, it can be taken within weeks by Russian tanks. The biggest threats of CCP’s ruling is not America which is far away, but an aggressive Russia.

 

How will Russia take Beijing when they can’t even take Kiev?

 

1 hour ago, Parsad said:

After visiting China in 2015 and India in 2019, what I've been saying ever since then is that the Western world better hope that China and India don't find a way of putting aside their border issues and historical disdain for each other.  Because if they ever put a free-trade agreement into place and worked together with the rest of the Asian region, it would dramatically tilt global economic, political and military power!

What about BRICS? 

[sleepydragon]

19 minutes ago, Castanza said:

Isn’t China trying to work with Russia on belt and road policy? Something tells me after this Ukraine war is over, the long arm of China will step in and help with Russias recovery. They seem to have a knack for stepping into distressed situations as of late. 

That’s just China being China, want to make money

but Chinese govt know in the history the only country that has taken lands from China is Russia, Japan, and Mongolia.

(mongolia is not too face losing since they are being called Chinese later lol)

 

[sleepydragon]

1 minute ago, mcliu said:

How will Russia take Beijing when they can’t even take Kiev?

 

What about BRICS? 

Kiev has international support.

if China invade Taiwan, and suppose it’s not going well, how confident Xi will be that Russia won’t take more Chinese lands?

I think there were underground bunkers in Beijing built in Mao’s years in case Russian drop a nuke in Beijing.

 

[Spekulatius]

19 minutes ago, sleepydragon said:

Kiev has international support.

if China invade Taiwan, and suppose it’s not going well, how confident Xi will be that Russia won’t take more Chinese lands?

I think there were underground bunkers in Beijing built in Mao’s years in case Russian drop a nuke in Beijing.

 

Russia taking China is laughable. If anything it’s going to be the other way around and China chops of some pieces from Russia.

[sleepydragon]

26 minutes ago, Spekulatius said:

Russia taking China is laughable. If anything it’s going to be the other way around and China chops of some pieces from Russia.

historically, Russian has taken a lot of pieces from China. Russia is weak now though.

 

also, Beijing’s location is unique. It’s very close to Russian border and there’s also a port in Tianjin. It’s not easy to defend if there’s a war between Russia and China. 

[adesigar]

4 hours ago, rohitc99 said:

You will have to look beyond the sensex. 5 companies - reliance, HDFC group, infosys, and icici bank account for 40%+ of it.

it’s not that different.
nifty went from approx 6000 to 18000

nifty 500 from approx 5000 to 15000 

 

In INR returns look decent in USD the returns have not been as good.

[Parsad]

2 hours ago, mcliu said:

 

What about BRICS? 

 

Nothing will come of BRICS.  Too disjointed, distant and each individually vulnerable.

 

I could see RIC, but they are each wary of the others.  But if they ever did get together...

 

Cheers!

[Parsad]

2 hours ago, Spekulatius said:

Russia taking China is laughable. If anything it’s going to be the other way around and China chops of some pieces from Russia.

 

I agree.  I think a ground and sea assault favors Russia presently, but that will change over the next decade.

 

Russia will need China's support in virtually every way...economically, politically and militarily...now that NATO has added Finland and will probably add a couple more European countries.  

 

Cheers!

[RadMan24]

6 minutes ago, Parsad said:

 

I agree.  I think a ground and sea assault favors Russia presently, but that will change over the next decade.

 

Russia will need China's support in virtually every way...economically, politically and militarily...now that NATO has added Finland and will probably add a couple more European countries.  

 

Cheers!

Depends who comes after Putin and if they view Europe or China as better for mother Russia. 

[Luke]

8 hours ago, Parsad said:

 

After visiting China in 2015 and India in 2019, what I've been saying ever since then is that the Western world better hope that China and India don't find a way of putting aside their border issues and historical disdain for each other.  Because if they ever put a free-trade agreement into place and worked together with the rest of the Asian region, it would dramatically tilt global economic, political and military power!

 

The manpower, brainpower and capital available would dwarf any other free-trade market!  You would then have a serious challenge to the USD.  Thankfully, it is very unlikely that will ever happen.  India and China have a hard enough time keeping their own jurisdictions in line, they would not be able to take a stiff arm approach to other countries like that.  Cheers!

 

3 hours ago, Parsad said:

 

Nothing will come of BRICS.  Too disjointed, distant and each individually vulnerable.

 

I could see RIC, but they are each wary of the others.  But if they ever did get together...

 

Cheers!

The videos i linked talked about exactly that, those countries have, as you said, so much manpower, willingness to grow and to rise to higher standards of living, they could have even bigger GDPs and play a way more important role than europe today. And with that of course plenty of competition for the so called safe heavens/companies we would have thought to exist for decades. Imagine if these geopolitical tensions are put aside and technology will be shared globally, many new smaller and bigger competitors coming in. As far as i am aware china is trying to connect and grow: 

 

https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative

 

Extrapolate this a few decades, exciting times! 

 

[Spekulatius]

5 hours ago, Parsad said:

 

I agree.  I think a ground and sea assault favors Russia presently, but that will change over the next decade.

 

Russia will need China's support in virtually every way...economically, politically and militarily...now that NATO has added Finland and will probably add a couple more European countries.  

 

Cheers!

Chinas economy, industrial capacity  and manpower is larger than Russia many times over. Also keep in mind that Russias army is now getting totally destroyed. 
Siberia is a logistical nightmare mare for Russia. They can’t even get logistics right in Ukraine, which is in their doorstep - now thinking they can do the same In Siberia and attack China in numbers? There is only one railroad line (Transiberia) which I guess could easily get destroyed.

 

There is no way that Russia attacks China and not get totally destroyed in the process.

[JAK]

10 hours ago, sleepydragon said:

I think there were underground bunkers in Beijing built in Mao’s years in case Russian drop a nuke in Beijing.

 

I remember reading about this before I visited Beijing. The history buff in me wanted to cry... 

Until the 1950s/1960s, Beijing had one of the World's largest and best preserved examples of fortified city walls. This was a series of walls outside the Forbidden City. The British etc. had made a few holes to make way for railroads, and some were damaged in relatively recent rebellions. However, the walls and towers were still standing for the most part.

 

Unfortunately, the powers that be wanted to modernise asap, and also build an underground metro to double as a bunker, and the quickest way to do that was to just knock down the walls and build the ring roads, metros, sewers etc. where they stood. So only a tiny segment of what the walls remain. By contrast, places like Xian or Pingyao, where there was less paranoia / urgency still have their (amazing!) walls.

[Castanza]

8 hours ago, Parsad said:

 

I agree.  I think a ground and sea assault favors Russia presently, but that will change over the next decade.

 

Russia will need China's support in virtually every way...economically, politically and militarily...now that NATO has added Finland and will probably add a couple more European countries.  

 

Cheers!

 

Yeah, I don't see a world where China and Russia are not aligned for the foreseeable future. They both offer each other things the other needs. They both have similar political/economical backgrounds. History aside, Russia has no chance of invading China or let alone taking any city. 

 

China will bankroll Russia after this war is over. They will build the alliance and build out their industry and support each others economies. China will probably want to control Mongolia and extend its influence as well. The more NATO grows, the more these other regimes will draw close together. Humanity is reaching a precipice of what's tolerable in terms of government moving forward. In the next 50-100 years it seems like a hard stance will be taken in one direction or the other. Since WWII alliances on both sides have just been growing stronger and stronger. 

 

China Brazil, Iran, Russia, Saudi Arabi, etc. doing deals in currency other than USD is a big deal. 

[rohitc99]

17 hours ago, Parsad said:

 

After visiting China in 2015 and India in 2019, what I've been saying ever since then is that the Western world better hope that China and India don't find a way of putting aside their border issues and historical disdain for each other.  Because if they ever put a free-trade agreement into place and worked together with the rest of the Asian region, it would dramatically tilt global economic, political and military power!

 

The manpower, brainpower and capital available would dwarf any other free-trade market!  You would then have a serious challenge to the USD.  Thankfully, it is very unlikely that will ever happen.  India and China have a hard enough time keeping their own jurisdictions in line, they would not be able to take a stiff arm approach to other countries like that.  Cheers!

I think there was some attempt in the 60s and India was caught napping which resulted in a war. I doubt there will be trust again and btw, there continue to clashes and disputes across the border