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Post by anitya on Jul 27, 2021 23:52:36 GMT
So what are your thoughts behind buying Anitya? Other posters are way smarter (in thought and execution) than I am. In addition to what everybody else has said, China Govt will cap growth of all large tech companies like BABA by way of anti-trust Regs but BABA in parts will be greater than the whole. So, we either start getting good dividends (potential repatriation risk) or get stock of different parts through spins / splits. But one will need patience as it may take a while for the thesis to play out. With the current low rates, my opportunity cost is low - playing right into central bank hands! Also, note the size of my China investment- not significant. I stay close to home!
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Post by uncleharley on Jul 28, 2021 12:27:20 GMT
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Post by yogibearbull on Jul 28, 2021 13:02:54 GMT
So, FXI has support at 36. If it breaks that, then next level is 32, March 2020 low. Are things that bleak? Catching falling knives via funds may be less dangerous.
I don't have FXI, but added to China exposure via MAPIX (26.81% China), MPACX (45.29% China) yesterday (these have tumbled badly too).
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Post by uncleharley on Jul 28, 2021 13:23:09 GMT
Your support levels may prove to be correct. The prudent thing to do would be to wait until the falling knife is stuck in the bottom. The Fed meeting today should enlighten us on the near term prospects for the domestic markets. Developing Covid news is not a positive for investors in general. The Chinese authoritarian exuberance could snowball way beyond any known support levels. There will be a time to buy Chinese stocks, but that time is not today and probably not tomorrow.
jmho
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Post by rhythmmethod on Jul 28, 2021 13:45:41 GMT
Your support levels may prove to be correct. The prudent thing to do would be to wait until the falling knife is stuck in the bottom. The Fed meeting today should enlighten us on the near term prospects for the domestic markets. Developing Covid news is not a positive for investors in general. The Chinese authoritarian exuberance could snowball way beyond any known support levels. There will be a time to buy Chinese stocks, but that time is not today and probably not tomorrow.
jmho Right, it was yesterday! I may sell today.
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Post by Deleted on Jul 28, 2021 14:03:24 GMT
I still haven't seen enough credible information to make me sell out of China. Regulatory risk has always been there. Why is BABA's p/e so low after all. I am not adding though. If the China exuberance snowballs it will affect the S&P and other developed markets.
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Post by ignatz on Jul 28, 2021 14:30:12 GMT
.........."your business can basically be written down to zero by state edict, how on Earth are you to plan for that?” Trying to resist my bottom feeder instincts, aka "buy when others are fearful". Maybe with something like MATFX
But the above quote looms large, particularly when I wouldn't consider a buy if it weren't at least 7 or 8% of total equities.
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Post by retiredat48 on Jul 28, 2021 17:42:44 GMT
I posted the following about three weeks ago on another thread...an update follows:
OK, I'll be one of the first to step in and say: YES, CHINA SITUATION/TREND IS ADVERSE, AND IS A BIG DEAL FOR ME.
We have always known that "political risk" aptly applies to a communist country, especially China. However, it has been muted last couple decades. I own a China specific holding, and have some Southeast Asia Fund investments that include China.
The last six months continue to set off alarms, and raised some yellow flags for me. Maybe even red flags. Long story of course. I am not confident Biden Administration in particular, or any president/USA Country can do much to forestall this.
I won't be surprised to wake up someday and find that China has nationalized, or taken away USA citizen ownership of involved companies. Yes, China had previously endorsed a strategy of marrying capitalism with State interests. But now we have Hong Kong, muslim lack of freedom, aggressive econ strategies, increasing military and reach, goal to be world leader, etc. "Didi" scenario a wake up call. Standby to lose Tiawan. Chinese companies already being shackled, and CEOs/major owners being controlled...including USA companies like Starbucks and NBA Basketball players.
I am surely not adding to any China investment, and will likely be pulling down/reducing some allocations/holdings. Also advising my kids of same.
Remember that hammer and sickle stuff. It is the "Peoples (working man) Republic of China; not the "Billionaires Republic of China". (I read where China went from none, to over 600 billionaires in last half decade). PRC also does not like making USA people wealthy!!
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An update: While some considered this post "too Political", I don't see how one discusses China w/o getting onto geopolitics. The China adverse trend continues. Looking from various views, at China anti-company schemes going on etc. , I see nothing favorable.
I will be reducing some fund holdings that are primarily China-based. This will be a process.
I also consider China will be the number one investment story for 2021. Standby.
R48
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Post by uncleharley on Jul 28, 2021 18:07:23 GMT
Your support levels may prove to be correct. The prudent thing to do would be to wait until the falling knife is stuck in the bottom. The Fed meeting today should enlighten us on the near term prospects for the domestic markets. Developing Covid news is not a positive for investors in general. The Chinese authoritarian exuberance could snowball way beyond any known support levels. There will be a time to buy Chinese stocks, but that time is not today and probably not tomorrow.
jmho Right, it was yesterday! I may sell today. The two gaps up have been filled. How low can it go?
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Post by rhythmmethod on Jul 28, 2021 18:13:21 GMT
Right, it was yesterday! I may sell today. The two gaps up have been filled. How low can it go?My interest in gaps decreased when I got braces at 11 years old. Your question is 50%, the other part is how high can it go? BABA is already 6% higher than when I bot it yesterday.
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Post by uncleharley on Jul 28, 2021 18:24:38 GMT
The two gaps up have been filled. How low can it go? My interest in gaps decreased when I got braces at 11 years old. Your question is 50%, the other part is how high can it go. BABA is already 6% higher than when I bot it yesterday. It is generally accepted that Gaps in the pricing of most charts need to be filled by a reversal in direction. The gaps down created by the nearly free fall in the price of FXI yesterday and the day before have been filled by todays rise in price. Now there is an open gap created by this mornings fast rise. If that gap is to be filled, the price has to go down. There are exceptions to this rule that are usually called a gap & run. Do you really think the Chinese large cap market is in a gap up & run mode? If not, how low can it go?
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Post by anitya on Jul 28, 2021 18:33:46 GMT
retiredat48 , As I said before, the China I know now I have known for 30+ years - I do not have any new information to tell me they are different now and I do not think they ever made claims or promises to the contrary. I think Norbert expressed similar sentiments 5-6 months ago. I am not saying your future China stock loss prediction is wrong - it is possible you are predicting a buyers‘ remorse from US investors. Kudos to you for the courage of conviction and doubling down and repeating your thesis. It is fine to discuss direct effects on investment. I prefer forum members from resisting the temptation to carry propaganda from whatever media they follow outside into the forum. I am not saying members do it deliberately- could be subconscious. By all means members should incorporate direct effects and resist absolutisms and cherry picking. Cherry picking is the greatest source of online bickering. Not saying you cherry pick but we all need to self govern in this respect also. For now, I am inclined to vote with yogibearbull and rhythmmethod , among others. Well, I already voted yesterday with my buys. Opposing views is what makes the market. Edit: "I will be reducing some fund holdings that are primarily China-based. This will be a process." Not sure what process is useful other than outright selling, given such a high conviction of negative view.
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Post by rhythmmethod on Jul 28, 2021 18:42:01 GMT
My interest in gaps decreased when I got braces at 11 years old. Your question is 50%, the other part is how high can it go. BABA is already 6% higher than when I bot it yesterday. There are exceptions to this rule that are usually called a gap & run. Do you really think the Chinese large cap market is in a gap up & run mode? If not, how low can it go? I see. Something has the gap AND the runs. In that case I might recommend braces AND Kaopectate. I’ll leave it to greater minds than mine to determine short term prices. I think it was beaten down too far and will be worth a lot more in the future. All kidding, of course, Uncle. Take care.
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Post by anitya on Jul 28, 2021 18:59:15 GMT
Off Topic -
I am listening to Powell Press Conference and likely will relisten to the recording. Seems to have way more meat this time.
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Post by anitya on Jul 29, 2021 0:39:34 GMT
I would not be surprised if the Chinese Govt bought Chinese equities yesterday. The question is how much. Unlikely they bought the US listed Chinese stock which would require disclosure or worse the stocks may become targets of de-listing by US Govt. Such delisting would seem fine for the Chinese Govt because that would increase the importance of their own exchanges.
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Post by anitya on Jul 29, 2021 3:12:25 GMT
Off Topic - I am listening to Powell Press Conference and likely will relisten to the recording. Seems to have way more meat this time. In today’s presser, Powell said the Fed does not know the cause of current decrease in yields in the (10 yr) Treasury market. With the largest collection of Econ PhDs (400?) if they are not able to figure it out, what chance the forum members got in making rate bets! If you are feeling lost in the fixed income market, you have good company!
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Post by anitya on Jul 30, 2021 0:19:21 GMT
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Post by Deleted on Jul 30, 2021 1:59:31 GMT
I did not really understand that letter from Seafarer. But it did not sound positive. Can some one summarize?
SFGIX has 22% in China and 29% in Korea. So seafarer does have some confidence on China. They increased China allocation from 15% to 22% in second quarter.
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Post by jongaltiii on Jul 30, 2021 2:36:12 GMT
www.barrons.com/articles/cathie-wood-ark-innovation-etf-china-stocks-51627500059Cathie Wood’s ARK Innovation ETF Has Sold Nearly All Its Chinese Stocks Summary… RK funds have been shedding Chinese stocks consistently over the past few weeks as Chinese regulators stepped up measures against the nation’s internet giants—including Alibaba Group Holding (BABA) and Didi Global (DIDI)—over antitrust and cybersecurity issues. Wood’s flight from Chinese stocks has helped her funds avoid what could’ve been much larger damage. The iShares MSCI China ETF (MCHI) plunged 13% from last Thursday’s close to Tuesday’s close. All of ARK’s ETFs, on the other hand, declined less than 5% during the same period.
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Post by retiredat48 on Jul 30, 2021 3:10:38 GMT
Thanks for posting info/link, jong...
R48
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mrc
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Post by mrc on Jul 30, 2021 5:36:33 GMT
Invesco Golden Dragon China ETF is the worst hit, as it invests mostly in ADRs I guess
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Post by yogibearbull on Jul 30, 2021 12:58:25 GMT
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Post by richardsok on Jul 30, 2021 14:53:49 GMT
WSJ has an editorial shedding light on the sell-off of China equities -- and it's not good news for foreign investors. An excerpt:
" The Western investor doesn’t own anything, since ownership of the VIE (offshore holding company that makes it possible for foreigners to have an at-a-distance interest in Chinese equities) does not translate into a claim on the assets of the operating Chinese company. The Western investor can make no demands on the management of the Chinese company because absent an equity stake there is no mechanism by which to influence or change management. In the event of a dispute, no one can guarantee a Chinese court would enforce the contracts binding the operating Chinese company to the VIE that Western shareholders do own.
Oh, and Beijing could decide at a stroke that it no longer is willing to tolerate this obvious thumbing of noses at black-letter prohibitions on foreign ownership. Which is exactly what the Chinese government said last weekend when its new rules for online-tutoring companies prohibited the firms from listing abroad using the VIE method." -----
So why the shock if it's only the online tutoring companies coming under restrictive 'by-the-book' regulations? Because the tutoring companies may be just the first step in a broader new Chinese get-tough policy. IOW, when an American investor "owns" a share in a mainland Chinese company, he doesn't actually "own" it in the sense he does a share of an American firm on the NYSE. He owns a share in an off-shore fiction in the expectation that the Chinese gov't will tolerate the arrangement that by-passes Chinese law.
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Post by uncleharley on Jul 30, 2021 16:06:29 GMT
Wow!!! Thank You for the post.
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Post by Deleted on Jul 30, 2021 16:46:06 GMT
This was discussed quite a bit in the media when BABA started trading. Did folks not know this? Does it seem probable that China would pull the rug out from under investors? I can't imagine, but maybe.
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Post by yogibearbull on Jul 30, 2021 17:01:15 GMT
While info about VIE structures used by Chinese companies listed in the US has been available, investors need to be reminded periodically about their flimsiness. VIEs incorporated in unstable small island countries may not offer much protection once both the US & China go after them.
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Post by Deleted on Jul 30, 2021 17:35:22 GMT
Alright, but I got that message pretty clear at the time. What happens if those ADRs become worthless? A lot of consequence - not only to investors, but to governments and global institutions. I personally don't see that happening easily, but would invest accordingly.
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Post by rhythmmethod on Jul 30, 2021 18:20:43 GMT
I agree that this is concerning. Thanks for the article richardsok. I sold my China specific holdings about a month ago. However, the risk / reward quotient became too much to ignore (for this BTDer) so as noted, I am taking a chance on BABA. I know this is simplistic, but when I see articles in WSJ and Barrons about dangers, I think the worst of the danger has past. Either way, I'll be watching my small wager closely. When there is little risk there will also be little potential profit.
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Post by javajoe on Jul 30, 2021 18:39:45 GMT
Interesting discussion. Normally I am more moderate/measured in my investing approach but in this case, is any of this recent chi-chi really "new news?" This is purely speculative but it feels a bit more like an over-bought / too-far-too-fast late 2020 reset looking for a narrative? The pattern of lower-highs has been building all year..
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Post by rhythmmethod on Aug 2, 2021 14:58:29 GMT
BABA appears to be packing on ~3.5% so far this AM. Sometimes I think going opposite the talking heads and looking for deep value, (of course acknowledging risk) makes sense to me. I'm not sure if there is a chart that would have predicted this or not. I'd be delighted to see it if it does exist. Is this a gap and run? No guarantees for the future of course, just calculated risk. Stay well.
Edit to Add - I'm really not trying to troll anyone nor be a smart @ss. I'm trying to wrap my head around the use of charts in a real world, rubber meets the road kind of way. Perhaps this is a continuation of the gap...or the run that will sometime fill-in backwards manner. However, if the chart is backwards info, how is it useful? Regardless of methods I'm wishing all success making $$.
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