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Post by bb2 on Aug 24, 2021 1:30:04 GMT
I read Xi's CCP 100th anniversary speech this weekend. He was very clear on his intensions for Taiwan:
"Resolving the Taiwan question and realizing China's complete reunification is a historic mission and an unshakable commitment of the Communist Party of China. It is also a shared aspiration of all the sons and daughters of the Chinese nation. We will uphold the one-China principle and the 1992 Consensus, and advance peaceful national reunification. All of us, compatriots on both sides of the Taiwan Strait, must come together and move forward in unison. We must take resolute action to utterly defeat any attempt toward "Taiwan independence," and work together to create a bright future for national rejuvenation. No one should underestimate the resolve, the will, and the ability of the Chinese people to defend their national sovereignty and territorial integrity."
(Taiwan is more complicated/diverse than you might think.)
His comments on Hong Kong seemed classic gaslighting if I'm not mistaken: (Why are people fleeing HK?)
"Comrades and friends,
We will stay true to the letter and spirit of the principle of One Country, Two Systems, under which the people of Hong Kong administer Hong Kong, and the people of Macao administer Macao, both with a high degree of autonomy. We will ensure that the central government exercises overall jurisdiction over Hong Kong and Macao, and implement the legal systems and enforcement mechanisms for the two special administrative regions to safeguard national security. While protecting China's sovereignty, security, and development interests, we will ensure social stability in Hong Kong and Macao, and maintain lasting prosperity and stability in the two special administrative regions."
Nationalistic stuff through it all, as to be expected.
Still sitting this out. The US is too good, so why bust my butt over China opportunities? Yet.
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Post by rhythmmethod on Aug 24, 2021 14:45:05 GMT
BABA is up ~9% in the past two days.
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Post by Chahta on Aug 24, 2021 14:57:34 GMT
Good buy.
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Post by rhythmmethod on Aug 24, 2021 15:18:15 GMT
When it approaches $250 we can call it a good buy. Sometimes what might be good buy and should be goodby are very close.
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Post by bb2 on Aug 24, 2021 16:16:50 GMT
US law. Chinese law. Accounting rules. VIE structure. Lots of risk. The price reflects it. Kind of like Bitcoin - speculative now. This from way back in 2014 provides a little insight on VIE: thediplomat.com/2014/09/no-one-who-bought-alibaba-stock-actually-owns-alibaba/You have to read the whole thing and I don't know how much of it all is relevant anymore. (I've also red the VIE structure is certainly illegal, so if the Chinese government wanted, they could shut it down anytime.) Does the fact VIE holders have no ownership or vote mean the VIE will be allowed to survive? "Whether the VIE could survive a challenge in China’s courts depends in large part on these small distinctions of law (as with the CIETAC case) and fact (as with the Minsheng bank case). These distinctions present hope and danger in roughly equal measure. On the one hand, because under the VIE structure there is no direct foreign ownership and no foreign control it is possible that China’s judiciary will not invalidate the VIE structure the way it invalidated the arrangement in the Minsheng Bank case. The business structure is different enough that the court could find that the factual differences between the two cases necessitate a different result. This is the part that gives investors hope." www.marketbeat.com/stocks/NYSE/BABA/institutional-ownership/Q3 2021 institutional selling : bought 7B sold 46B. Recent pop : Reddit crowd following the quick change of mind by ARK leading to covering? Beyond my abilities to participate.
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Post by bb2 on Aug 24, 2021 16:50:05 GMT
Just found this: www.lexology.com/library/detail.aspx?g=4c662dfd-1a0f-4d09-85f8-e06c8bd9b7ba"Foreign capital is prohibited from engaging in mergers or acquisitions, trustee arrangements, franchising, or using “variable interest entity” (VIE) structures to control or participate (through equity or otherwise) in “subject-based” training institutions. All existing illegal activities will need to be cleaned up." The actual text from the Opinions, another translation, (similar): "Disciplinary training institutions shall not be listed for financing, and capitalized operations are strictly prohibited; listed companies shall not invest in discipline training institutions through stock market financing, and shall not purchase the assets of discipline training institutions by issuing shares or paying cash; foreign capital shall not be acquired through mergers, acquisitions, and trustees Operating, franchising, and using variable interest entities to hold or participate in academic training institutions." And this conclusion from the Lexology piece: "Although the VIE structure sits in a grey area of Chinese law, as a practical matter, the Chinese government has been reluctant to take actual enforcement actions against such structure in the two decades since Sina Corporation completed its IPO in the US using a VIE structure for the first time. Although the Opinions prohibit foreign investors from investing in “subject-based” training institutions through mergers and acquisitions or VIE structures, it does not necessarily mean that the government has changed its position on the VIE structure itself. Rather, the Opinions suggests that the Chinese government recognizes the VIE structure as one of the ways for foreign investors to invest in restricted sectors." So what sectors may be selected in the future? No idea. I also read that VIE DOES allow VIE holders to influence the companies in China but only once. Every other thing I've read says no.
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Post by bb2 on Aug 24, 2021 17:17:57 GMT
Been trying to understand if education is just the first target. Maybe it's a one off: foreignpolicy.com/2021/07/28/china-private-tutoring-education-regulation-crackdown/"It’s tempting to relate the regulations of private education to Beijing’s war on technology companies and monopolies—and regulators are certainly empowered by the government push against private business. But these new measures also reflect a widespread belief in China that the private tutoring sector has bad effects for urban upper-middle-class parents and children, both in costs for the parents and the psychological impact on children." I've read it's more of a class issue; that only the upper class can afford tutoring. And also the fear of losing control over what's being taught. These are more worrisome motives if you ask me. Ideological. They are communists, after all.
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Post by bb2 on Aug 24, 2021 17:32:14 GMT
What?
Dissident entrepreneur sentenced. Sun Dawu, an agricultural entrepreneur and multimillionaire who became an outspoken critic of CCP policy, was sentenced to 18 years in prison on Wednesday. The sentence is identical that given to Ren Zhiqiang, a retired tycoon who criticized Xi, last year. Sun was a popular figure known for his local philanthropy; he had a sharp eye for the impact of policy on ordinary people, especially farmers.
Targeting dissident businesspeople is a boon for officials: Not only do they remove a potential political threat, but the individual’s financial assets can also be divvied up as rewards for the faithful. Sun’s son hinted at that, saying that an official had recommended several unrelated businesses to take over the Dawu Group.
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Post by richardsok on Aug 24, 2021 21:02:37 GMT
What? Dissident entrepreneur sentenced. Sun Dawu, an agricultural entrepreneur and multimillionaire who became an outspoken critic of CCP policy, was sentenced to 18 years in prison on Wednesday. The sentence is identical that given to Ren Zhiqiang, a retired tycoon who criticized Xi, last year. Sun was a popular figure known for his local philanthropy; he had a sharp eye for the impact of policy on ordinary people, especially farmers. Targeting dissident businesspeople is a boon for officials: Not only do they remove a potential political threat, but the individual’s financial assets can also be divvied up as rewards for the faithful. Sun’s son hinted at that, saying that an official had recommended several unrelated businesses to take over the Dawu Group. Chinese history what it's been the last 70 years, you'd think these business oligarchs would know enough to keep a low profile, preferably humble and obscure from the media. Evidently the richer and more powerful one becomes, or the more he utters independent opinions, the more he's watched by the cold, jealous eyes of the CCP. There are probably a hundred or more other super-entrepreneurs in China we have never heard about who know to "ask" for guidance at every step, put gov't ministers on payroll as "advisors" or board members, and certainly keep out of the newspapers. In India it is possible for a Tata family to build an empire, or Carlos Slim in Mexico. But in China -- above a certain level, life seems perilous indeed. Icarus comes to mind.
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Post by jongaltiii on Aug 24, 2021 23:02:10 GMT
Future Returns: Finding Value in Asian Markets Barrons www.barrons.com/articles/future-returns-finding-value-in-asian-emerging-markets-01629831214”he performance of Chinese tech stocks such as Alibaba Group Holding Ltd. (BABA), Tencent Holdings Ltd. (700.Hong Kong), and ride-hailing company Didi Global (DIDI) began grabbing headlines in the fall of 2020 as they attracted increasing attention from the country’s regulators. In November, Ant Group’s anticipated US$3.4 billion initial public offering was suspended after executives of the Alibaba payments firm and Jack Ma, founder and controlling shareholder, met with Chinese regulators. China is a country emerging from a period of strong economic growth that “suddenly finds itself with Alibaba representing 20% of [the] gross market value of all retail sales in China,” he says. “In effect, they are truly just catching up and trying to align business practices with the long-term interests of the nation.” In Brochin’s view the crackdowns are “not an assault on private entrepreneurs.” The Chinese Communist Party knows they need continued economic prosperity and economic growth to stay in power, and “they know the private sector provides that prosperity to the people of China,” he says. India as a “Favorite Place” to Invest The urbanization and increasing domestic consumption happening in China is also occurring in India, although the social and economic transformation of the country has a longer way to go, Brochin says. Nearly half the population of India, for instance, is still employed in agriculture or agricultural-related jobs, he says, which points to the potential for growth as that percentage declines.” Feels perilous to me… treading with caution… Interesting read.
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Post by Deleted on Aug 24, 2021 23:10:48 GMT
When people say it is good investment if you have long-term horizon. That truly worries me.
Wastech Emerging markets fund has 28% in India. EM funds with high % in India are doing well so far ytd.
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Post by bb2 on Aug 31, 2021 19:42:33 GMT
Another risk? Evergrande - Chinese real estate company I'm sure you've heard of recently. And risk not just for Chinese stocks. Interesting history of the Chinese real estate market too. www.epsilontheory.com/ever-grande/?utm_source=ET+Newsletter&utm_medium=Email&utm_campaign=websiteComments there are interesting - wish some were more revealing, as I don't don't know enough about financial interconnectedness to make sense of them. Sheesh, even Tether is being implicated - Footnote 2: "[2] @thelastbearsta1 has an interesting theory that Tether (which we discussed here) may have invested customer funds in Evergrande commercial paper. Tether owns just under $30 billion of commercial paper, yet trading desks in Europe and New York have not had dealings with it. Evergrande, meanwhile, is one of the biggest issuers of commercial paper, with $32 billion outstanding at the end of 2020 (although consolidated number could be higher). "
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Post by Capital on Aug 31, 2021 22:24:49 GMT
Another risk? Evergrande - Chinese real estate company I'm sure you've heard of recently. And risk not just for Chinese stocks. Interesting history of the Chinese real estate market too. www.epsilontheory.com/ever-grande/?utm_source=ET+Newsletter&utm_medium=Email&utm_campaign=websiteComments there are interesting - wish some were more revealing, as I don't don't know enough about financial interconnectedness to make sense of them. Sheesh, even Tether is being implicated - Footnote 2: "[2] @thelastbearsta1 has an interesting theory that Tether (which we discussed here) may have invested customer funds in Evergrande commercial paper. Tether owns just under $30 billion of commercial paper, yet trading desks in Europe and New York have not had dealings with it. Evergrande, meanwhile, is one of the biggest issuers of commercial paper, with $32 billion outstanding at the end of 2020 (although consolidated number could be higher). " Amazing way to make money. You sell someone something; but, it remains your property. Oh yeah the British did that with Hong Kong for 99 years. We know who owns it now. I think I will just keep my dollars in the old USA where I can get a deed that remains valid for as long as I want to own the land. The more I look into China the less that I want to own any of it.
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Post by Chahta on Aug 31, 2021 23:24:06 GMT
When people say it is good investment if you have long-term horizon. That truly worries me. Wastech Emerging markets fund has 28% in India. EM funds with high % in India are doing well so far ytd. India is a capitalistic country. China is not.
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Post by bb2 on Aug 31, 2021 23:28:58 GMT
Remember Hawaii's leasehold property? I think it's not so common anymore. I was in Kona some years back talking to a couple guys who'd lived in the islands before, buying up condos for very little money. They knew what they were doing. No crumbling concrete columns for those guys. I always really sucked at real estate. Never had a clue.
But yes. Seems these days all you need to know is , COMMUNIST COUNTRY. Be informed, which is no small task.
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Post by fishingrod on Sept 1, 2021 0:38:49 GMT
This new news is what concerns me most. China restricting it youths to only 3 hours of "gaming" a week. Maybe not a bad thing for the kids, but this will obviously make an impact on advertising and sales through merely time on the internet. I am sure most active China funds have had a big hiccup in their thinking. I am in holding pattern and am trusting VWILX managers to do what they are paid for...
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Post by Deleted on Sept 1, 2021 1:00:05 GMT
I reviewed my international holdings. I have 19% of my portfolio in them. Worse performer is BABA. AIA is down too, but less than 10%. Both of these are smaller amounts. I decided to buy 2 etfs and 2 funds - each broken into developed and emerging. They are performing nearly the same so not seeing an advantage to management - but have only held since the beginning of the year. Developed etf/funds are up 11% and emerging are so little positive I would call them flat. Due to drag from China. VSS - small cap is 15% - I have a little more in it as AIA and BABA combined. This is my first foray into international. Lessons learned - weight developed more than emerging which I did. Don't buy individual stocks, but keep it small if you do. Maybe forgo funds for etfs. Diversify. Does China performance count as being not correlated with US market? If so, then it's working........
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Post by roi2020 on Sept 1, 2021 6:58:31 GMT
I don't directly own any Chinese stocks or EM OEFs/ETFs. Like fishingrod , I'll let the VWILX managers sort it out.
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Post by Capital on Sept 1, 2021 17:14:19 GMT
Another risk? Evergrande - Chinese real estate company I'm sure you've heard of recently. And risk not just for Chinese stocks. Interesting history of the Chinese real estate market too. www.epsilontheory.com/ever-grande/?utm_source=ET+Newsletter&utm_medium=Email&utm_campaign=websiteComments there are interesting - wish some were more revealing, as I don't don't know enough about financial interconnectedness to make sense of them. Sheesh, even Tether is being implicated - Footnote 2: "[2] @thelastbearsta1 has an interesting theory that Tether (which we discussed here) may have invested customer funds in Evergrande commercial paper. Tether owns just under $30 billion of commercial paper, yet trading desks in Europe and New York have not had dealings with it. Evergrande, meanwhile, is one of the biggest issuers of commercial paper, with $32 billion outstanding at the end of 2020 (although consolidated number could be higher). " Amazing way to make money. You sell someone something; but, it remains your property. Oh yeah the British did that with Hong Kong for 99 years. We know who owns it now. I think I will just keep my dollars in the old USA where I can get a deed that remains valid for as long as I want to own the land. The more I look into China the less that I want to own any of it. Been thinking some more about China today. Not only do I not want to own it; but, I don't want to rent it either.
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