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Thanks for this great video! Like I say, you always make great video at the end of each week.
ReplyDelete400 million people from China are going through lock down. I would definitely stay clear away from any Chinese stocks or be an investor of any Chinese companies. The Chinese government is currently not stable. This will serve as a wake call for all western companies, including Europe and US, that cheap labors and lands come with a price in China, especially you are dealing with the biggest communist party in the world. Europe learns a great lesson for depending too much on Russia for its energy. And now the world, including Apple, should understand that China is high risk in terms of IP theft, political instability, and representation damages.
I am quite glad that the US economy is diversified and won't be affected by China too much.
The year 2030 will be an incredible year as I foresee that companies, including the battery manufacturers, will source locally in lieu of sourcing from China. (Tesla got plants in US and Berlin, Germany)
Thanks Sam! And, yes, you're voicing a legitimate, and what is ultimately a growingly consensus view on China... And, even before the latest turmoil, companies have been, albeit quietly, diversifying their production away from China (although not entirely)... Apple moving 5% to India... Vietnam (a recent addition to our core), as well as other destinations, look to be chief beneficiaries (not a new story for Vietnam)...
DeleteDe-globalization is a main factor in our overall investment thesis, and view on inflation, going forward...
The big question going forward, however, is, will this truly be a 21st-Century story that culminates in a Tiananmen Square-like outcome, or will the globally-spreading rise in populism ultimately win the day in China as well... Considering Xi's commercial ambitions (globally), and, therefore, constraints, I don't know that another Tiananmen Square event is a given right here...
From a purely investment standpoint, you might be surprised (I emphasize "might be") over the next year with regard to Chinese equities... (not a recommendation!)
Thanks! I just texted my buddy from Bakersfield. I told him that your blogs and comments make me think instead of having bias to my conviction. You are right that Xi's commercial ambitions (globally) are one (1) belt and one (1) road on the silk road connecting China to Europe. China as we speak is building many major Ports at different continents. I definitely agree that Chinese equities may rebound next year after all this turmoil is over.
DeleteIn the meantime, short term market dynamic on December 13 (CPI) and December 14 (Fed rate hike) will be very interesting. Is the market really peachy and rosy? Maybe! Consumers spent record high, near $9Billion, on Black Friday. We have Cyber Monday buying coming up and consumers may spend more money compared to last year. Majority of the people spend on their credit cards. We will see what happen in December. (I do see the S&P 4150 to be a huge resistance)
Thanks! I just texted my buddy from Bakersfield. I told him that your blogs and comments make me think instead of having bias to my conviction. You are right that Xi's commercial ambitions (globally) are one (1) belt and one (1) road on the silk road connecting China to Europe. China as we speak is building many major Ports at different continents. I definitely agree that Chinese equities may rebound next year after all this turmoil is over.
DeleteIn the meantime, short term market dynamic on December 13 (CPI) and December 14 (Fed rate hike) will be very interesting. Is the market really peachy and rosy? Maybe! Consumers spent record high, near $9Billion, on Black Friday. We have Cyber Monday buying coming up and consumers may spend more money compared to last year. Majority of the people spend on their credit cards. We will see what happen in December. (I do see the S&P 4150 to be a huge resistance)
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Marty MazorraNovember 27, 2022 at 12:15 PM
Good stuff Sam!
With stocks down this year, there'll be a good amount of tax loss selling beginning next week (I suspect)... Whether sellers will use it as an excuse to step aside for a bit, given the big Q4 rally thus far, or immediately rotate into other equities remains to be seen...
And, absolutely!, the next couple of weeks are big in terms of data, Fed action, retail spending, options expiration 12/16, etc...
I'm very impressed Sam with your interest in markets and the economy, your depth of thought, etc.. And, yes!, always strive to remain openminded to all possibilities when it comes to markets... It's not easy, believe me, but it's absolutely critical to success!
I highly recommend "Geopolitical Alpha" by Marko Papic
Thanks for this book recommendation. I ordered it from Amazon and should arrive by next Tuesday. Take Care! Have a great weekend!
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