China

[sleepydragon]

3 minutes ago, tnp20 said:

 

Thanks for posting that article.  Yeah "Xi" is screwing up badly and elders are worried about future stability and support for CCP ....there are 4 scenrarios I see....

 

(i) XI gets removed. This is low odds.

                  (a) New guy worse - disaster for China and possibly the global economy - this is a super low odds here.

                  (b) New guy slightly or materially better - some confidence is regained with respect to China initially and further as more confirming and positive data comes in

 

(ii) Xi doesn't get removed - most likely

                   (a) He maintains his destructive course and even double downs - economy worsens and stability is threatened - this would result in (i) above sooner or later.

                    (b) He pulls back like he did with his Covid policy and presses his sub-ordinates to go all out on the economy - economy recovers in the near and medium term and stocks get a relief rally/sugar rush at minimum.

 

(ii)(b) is most likely from a logical point of view otherwise pressure on Xi will be tremendous.

 

And then the second striking factor is that the central government has essentially no debt. Central government debt has different definitions, but including the railway ministry, it’s 25 percent of GDP, which is a fraction of the debt of the U.S. federal government. It’s a fraction of the debt of France. It’s well below the debt of Germany, which is by far the most frugal of the major advanced economies.

 

https://nymag.com/intelligencer/2023/09/will-chinas-economic-slump-hit-the-u-s.html

 

 

 

If this is true, they have plenty of fiscal space to juice economy IF THEY WANT TO. And having the capacity is the hard part, the will to do it is just a soft decision part that can be switched on or off easily. If they didnt have the capacity, it would be a different story.

 

This means local government debt can be soft transferred to the central government alleviating local government debt burdens....

 

 

 

 

 

Another important take away from this is Xi’s power is not unchecked, like many westerners believed. The elders are still pretty powerful and are not blind to the problems in China. 
 

Also, I think the chance he get removed or severely weakened is higher. If the elders are not confident and are ready to remove him, they will not complain to him at all.

[Spekulatius]

41 minutes ago, sleepydragon said:

https://twitter.com/thisischaniece/status/1699029265042506041?s=46&t=Z-gsu-O6_LALehjknzotyA

 

This article seems very speculative. I don't think anyone can know what is going on within the CCP inner circle.

[sleepydragon]

27 minutes ago, Spekulatius said:

This article seems very speculative. I don't think anyone can know what is going on within the CCP inner circle.

Japanese news usually have pretty read on Chinese affairs.  Look at the recent “spy” arrests by China, they are Japanese..

 

Anyway, at least the video of Li Keqiang still touring around, smiling andaccepting people’ applauding , that’s pretty unusual..in china

[Parsad]

5 hours ago, Spekulatius said:

Even if something is "un-investible" it can be an intelligent speculation.

 

Nooooo!  Speculation is speculation.  Nothing intelligent about it.  

 

Doesn't mean you can't do it though.  

 

Cheers!

[mcliu]

https://www.reuters.com/technology/teardown-huaweis-new-phone-shows-chinas-chip-breakthrough-2023-09-04/

[zippy1]

31 minutes ago, mcliu said:

https://www.reuters.com/technology/teardown-huaweis-new-phone-shows-chinas-chip-breakthrough-2023-09-04/

If this is produced with ASML DUV immersion tools as speculated, then what to observe is whether ASML will stopping shipping DUV immersion tools as scheduled at the end of this year.  Also, will ASML continue supporting the installed DUV immersion tools in China?  If for some reasons, ASML stops supporting DUV immersion tools in the future, then these phones will become sort of "collector items."

Edited September 6, 2023 by zippy1

[hillfronter83]

3 hours ago, sleepydragon said:

Japanese news usually have pretty read on Chinese affairs.  Look at the recent “spy” arrests by China, they are Japanese..

 

Anyway, at least the video of Li Keqiang still touring around, smiling andaccepting people’ applauding , that’s pretty unusual..in china

Did people forget Hu Jingtao got hauled away in front of the whole world not long ago? To think any elder can pressure Xi is just laughable.

[Guest]

3 hours ago, Parsad said:

 

Nooooo!  Speculation is speculation.  Nothing intelligent about it.  

 

Doesn't mean you can't do it though.  

 

Cheers!

 

 

All investing is, ultimately, speculation. All of it.

[tnp20]

I had said earlier that I am seeing the news flow change in terms of negativity being less....

 

I saw this today confirming my own observations....can't vouch for what the stocks will do but news flow is less negative now...

 

Edited September 6, 2023 by tnp20

[Parsad]

Just now, stahleyp said:

 

 

All investing is, ultimately, speculation. All of it.

 

No, that's not right at all.  If someone offers you a $20 bill for $10, that's not speculation!  Cheers!  

[tnp20]

24 minutes ago, Parsad said:

No, that's not right at all.  If someone offers you a $20 bill for $10, that's not speculation!  Cheers! 

 

Incorrect.

 

Your mathematical equivalent is 100% probability of betting $1 and likely getting $2.

 

But what about  a game where you bet $1 with a chance of earning speculatively $20 and there is 1 in 5 chance (20% probability)...if you do it 5 times, you are likely to get 4 times your return instead of a double.

 

I high light the word likely....as Its all probabilities, nothing is certain in life ...and the ultimate underlying reason for that is quantum mechanics.

 

 The issue is your expertise in correctly handicapping. One mans 1 in 4 is another man's 1 in 2...its what makes an investment market.

 

 

 

 

[Parsad]

2 hours ago, tnp20 said:

 

Incorrect.

 

Your mathematical equivalent is 100% probability of betting $1 and likely getting $2.

 

But what about  a game where you bet $1 with a chance of earning speculatively $20 and there is 1 in 5 chance (20% probability)...if you do it 5 times, you are likely to get 4 times your return instead of a double.

 

I high light the word likely....as Its all probabilities, nothing is certain in life ...and the ultimate underlying reason for that is quantum mechanics.

 

 The issue is your expertise in correctly handicapping. One mans 1 in 4 is another man's 1 in 2...its what makes an investment market.

 

 

 

 

 

Ah, no incorrect.  If I walk by and drop a $20 bill, and you pick it up, you have $20.  Nothing to do with quantum mechanics, handicapping or probabilities.  

 

Cheers!

[UK]

https://www.bloomberg.com/news/articles/2023-09-06/china-mulls-law-banning-clothes-that-hurt-feelings-of-others?srnd=premium-europe

 

“Shouldn’t the spirit of Chinese nation be strong and resilient?” the person asked. “Why can it be easily damaged by a costume?”

[Guest]

9 hours ago, Parsad said:

 

No, that's not right at all.  If someone offers you a $20 bill for $10, that's not speculation!  Cheers!  

 

That isn't investing either. That is someone handing you money!

[james22]

Do efficient markets drop $20 bills?

[Luca]

China is absolutely investible guys, especially with a long, long term horizon of 10+ years and with buying wide moat businesses. China will develop, so will their jurisdiction, they are on a level of a 1985 Germany on a per Capita Basis, reality will slap you in the face over time. 

Edited September 6, 2023 by Luca

[no_free_lunch]

1 hour ago, Luca said:

China is absolutely investible guys, especially with a long, long term horizon of 10+ years and with buying wide moat businesses. China will develop, so will their jurisdiction, they are on a level of a 1985 Germany on a per Capita Basis, reality will slap you in the face over time. 

China HAS developed over the past decades.  The issue is investors haven't been getting wealthy there, at least not from index funds.  Not worth the risk.  I have to worry a out corruption plus investment risk.

[tnp20]

Just curious....how many would invest in Saudi Arabia ....ARMCO for example ?

 

Would you invest in Saudi Arabia and not China ? And if so what would edge Saudi Arabia over China ?

 

 

[Luca]

33 minutes ago, tnp20 said:

Just curious....how many would invest in Saudi Arabia ....ARMCO for example ?

 

Would you invest in Saudi Arabia and not China ? And if so what would edge Saudi Arabia over China ?

 

 

Saudi Arabia is a hot desert and technologically less advanced than China. But wouldnt mind investing there if id find something cheap. 

[Intelligent_Investor]

53 minutes ago, no_free_lunch said:

China HAS developed over the past decades.  The issue is investors haven't been getting wealthy there, at least not from index funds.  Not worth the risk.  I have to worry a out corruption plus investment risk.

That's because Chinese index funds for a long time were very heavy on shitty, low margin, commoditized industrial businesses or cyclicals that aren't conducive to buy and hold. If you invested in consumer/tech you would've made a lot of money over the past several decades. Buffett and Munger have both made a killing in China picking individual stocks, and I think that's the way to go with China, although the indices are probably cheap enough now that forward returns are decent.

[Luca]

37 minutes ago, no_free_lunch said:

China HAS developed over the past decades.  The issue is investors haven't been getting wealthy there, at least not from index funds.  Not worth the risk.  I have to worry a out corruption plus investment risk.

Considering that valuations are at rock bottom and if they go back to US/West levels, you would have results that have beaten the DAX. Many have gotten rich like Koos Bekker and chinese fund managers outperform hard...:)

[Luca]

21 minutes ago, Intelligent_Investor said:

although the indices are probably cheap enough now that forward returns are decent.

Definitely 

[mcliu]

1 hour ago, no_free_lunch said:

China HAS developed over the past decades.  The issue is investors haven't been getting wealthy there, at least not from index funds.  Not worth the risk.  I have to worry a out corruption plus investment risk.

I think you just have to be careful and invest in the right companies.

 

Battery & cars:

 

Alcohol

[Parsad]

8 hours ago, stahleyp said:

 

That isn't investing either. That is someone handing you money!

 

Essentially that's what happens every so often.  People do ridiculously stupid things because they panic.

 

I bought Sears bonds in 2008 at 70 cents on the dollar.  Not bonds out a year or more...bonds that were out less than 3 months!  And at that time, Sears had enough cash on hand alone to cover operations and debt servicing for the entire year!

 

In March of 2020, I bought Biglari Holdings for $49, when book value was over $250.  They had ample securities to cover all expenses.  People were worried about the pandemic and SNS' debt...even though the debt was non-recourse...it was a dollar trading for 20 cents.

 

No speculation involved!  Cheers!

[Parsad]

8 hours ago, james22 said:

Do efficient markets drop $20 bills?

 

You should know better.  Markets are not always efficient.  Cheers!