Deleted
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Post by Deleted on Sept 15, 2021 16:06:39 GMT
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Post by bb2 on Sept 15, 2021 23:32:11 GMT
I love this: "With that long lead in, I think that we are positioned to not only value Tencent, Alibaba, JD.com and Didi, but also to bring in the effect of activist government on their value drivers in the future. In the process, the question of whether these companies are cheap, given their recent mark downs, or expensive, will be answered. " Wow, brings me back to my corporate days with that speak. Trouble is, who knows what the Chinese government will do in the future. I don't want to be holding fake stock in a Chinese company that's being run by the Chinese government after the CEO was "disappeared". Snap your fingers and a huge global financial hub with a population of 7.5 million is now communist. Xi has stated in no uncertain terms that Taiwan will be next. Read his CPP anniversary speech. I don't understand how there are any China bulls out there. www.reuters.com/world/china/china-break-up-ants-alipay-force-creation-separate-loans-app-ft-2021-09-12/And don't get me going on AMD. No idea how that company was allowed to grow on the back of giving tech secrets to China. Edit: I read Aswath regularly, or maybe skim is more accurate. I just think the "valuation master" is missing the forest for the trees. Then again, I'm just some random internet fart and he's an NYU prof. Well connected and probably knows what's going on in China. |
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Post by Chahta on Sept 18, 2021 21:06:29 GMT
I understand the investors smarter than me on owning the next new thing, but if I/we value companies valued by capitalism how can China companies that are fake capitalism (communism) be valued the same? Is there really that much to gain by owning them? I don't know since I don't bother to look.
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Post by johntaylor on Sept 19, 2021 13:51:33 GMT
My most China-specific holding is only up 4.9 percent
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Post by uncleharley on Sept 19, 2021 19:06:51 GMT
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Post by uncleharley on Sept 20, 2021 12:02:56 GMT
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Post by bb2 on Sept 20, 2021 15:59:48 GMT
I've been an outspoken China bear but controlled economy means controlled so I'm guessing there's limited downside. Evergrande situation has been known for some time and from what I've read, the government has helped create this problem by reigning in Evergrande borrowing. Systemic issues I have to think aren't in the cards. Still not buying quite yet.
MIAPX (42% in Healthcare, 48% China) up 1.5% recently. This is where I might go when/if I do.
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on Sept 20, 2021 16:06:23 GMT
Our equity allocation hold 4% Chinese yuan stocks.
Our FI allocation hold 6% Chinese yuan bonds.
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Post by richardsok on Sept 25, 2021 12:48:25 GMT
Zweig at the WSJ published a major article on China this morning. Don't know if the link is behind a paywall, so I cobbled together the major points:
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NOBODY KNOWS ANYTHING, because Chinese corporations and their investors are hostage to the whims of Xi Jinping, who is effectively the country’s president for life. Executives, companies and entire industries formerly favored by Xi and the ruling Communist Party have been stripped of power and value without warning, making foreign investors look like fools....
Because NOBODY KNOWS ANYTHING, investors should be sure they are comfortable with how much exposure they have to China.
On Wall Street, hype almost always leads to heartache...
Between its inception at the end of 1992 and this Aug. 31, the MSCI China stock index has returned an average of 2.2% annually, including dividends. Over the same period, the MSCI Emerging Markets index grew 7.8% annually; the S&P 500, 10.7%.
That covers a nearly 30-year period in which China’s economy often grew by at least 10% a year. Nevertheless, you would have earned much better returns on U.S. Treasury securities than on Chinese stocks. Maybe China, which holds more than $1 trillion in U.S. Treasurys, knew something that Wall Street didn’t....
Many analysts, commentators and investors are calling China’s recent actions a “regulatory crackdown.”
That isn’t what’s happening, though, says Andrew Foster, chief investment officer at Seafarer Capital Partners LLC, a global asset manager in Larkspur, Calif....
“These are not regulatory events,” he says. “These are policy interventions to reshape Chinese society, guided by Xi’s personal agenda, intended to effect objectives that aren’t always knowable.”...
Because that agenda is fluid, opaque and unpredictable, says Mr. Foster, “investors should be very cautious about relying on past experience when forming expectations about future investing outcomes....
Wall Street belief that Beijing is bound to move toward free capital markets is based on shaky evidence....
Chinese governments have been meddling in the stock market since the 19th century. Again and again, the authorities inflated bubbles with cheap credit, planted government officials on corporate boards, micromanaged daily operations and subverted the rights of outside shareholders....
Anyone who tells you that you need to invest more than a tidbit in China is asking you to bet that the future will be nothing like the past.
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Post by anitya on Oct 8, 2021 18:32:36 GMT
Hi Waffle, Thanks for the post. The article ends with: "I decided that the potential upside of hoping that the discount narrows over time is exceeded by the downside of creating an extra layer between me and my Tencent investment. ( For those of you who want to track my Tencent investment, and perhaps taunt me if (or when) I get wrong, I bought the ADR on August 31.)" [Bold added] The parenthetical text is also consistent with his commentary in the youtube video linked in the article where he says he bought Tencent ADRs (not the South African proxy, Naspers). The Youtube commentary starts at 37:45 minute mark. The relevant slide in the Youtube video shows the first sentence quoted above. What am I missing? Thanks. |
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Deleted
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Post by Deleted on Oct 8, 2021 20:46:00 GMT
You are right. I mis read it. He is not investing via Naspers but directly into tencent.
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on Oct 8, 2021 23:42:13 GMT
I'm a China bear. I don't like what I'm seeing.
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Post by anitya on Oct 9, 2021 7:01:52 GMT
You are right. I mis read it. He is not investing via Naspers but directly into tencent. Do not be hard on yourself. It is possible he added the parenthetical language later. The sentence before the parenthetical is confusing in light of his trade. In addition, Naspers is also traded in the US as an ADR to compound the confusion. Thanks for replying. |
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on Oct 9, 2021 8:55:37 GMT
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Post by richardsok on Oct 9, 2021 13:28:59 GMT
Agree with every statement you make. Except the last. Is it implausible to you that interest rates might rise (hammering your bonds leg) and cause the stock market to plunge (shredding your equities) ? Simultaneously ? |
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Post by uncleharley on Oct 9, 2021 13:42:51 GMT
"Is it implausible to you that interest rates might rise (hammering your bonds leg) and cause the stock market to plunge (shredding your equities) ?
Simultaneously ?"
Bingo!!!!! You win the prize for the question of the year, or at least the month.
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on Oct 10, 2021 18:22:07 GMT
Not at all. Both should get hammerered at the same time. Yields will also go up.
We need to hold equities and we stick with investment grade bonds.
A simple 50/50 and see what happens.
"Is it implausible to you that interest rates might rise (hammering your bonds leg) and cause the stock market to plunge (shredding your equities) ?"
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Post by johntaylor on Oct 13, 2021 14:08:43 GMT
Correlations tend to increase in down mkts, and that applies to stocks, bonds, hedge funds, currencies, and intl bond mkts (e.g., Page and Taborsky, "The Myth of Diversification", Journal of Portfolio Mgt, Summer 2011).
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Post by roi2020 on Oct 13, 2021 20:42:37 GMT
I agree that asset class correlations tend to increase during downturns. Historically, intermediate-term or long-term treasuries have exhibited negative correlations with equities and provided the best ballast. It will be interesting to see how they perform in a rising interest-rate environment. Link |
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Post by chang on Oct 13, 2021 21:30:28 GMT
I agree that asset class correlations tend to increase during downturns. Historically, intermediate-term or long-term treasuries have exhibited negative correlations with equities and provided the best ballast. It will be interesting to see how they perform in a rising interest-rate environment. Link We should be able to look to history to see that. |
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Post by richardsok on Oct 13, 2021 22:13:28 GMT
Correlations tend to increase in down mkts, and that applies to stocks, bonds, hedge funds, currencies, and intl bond mkts (e.g., Page and Taborsky, "The Myth of Diversification", Journal of Portfolio Mgt, Summer 2011). I'm glad you posted this, citing an academic study examining this phenomenon. I first noticed a similar effect during the 2008 crash when, to my anguish, gold was hammered right along with equities. I've since posted several times on M* that diversification was enormously overrated as a protective strategy, in my experience. |
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Deleted
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Post by Deleted on Oct 13, 2021 22:30:34 GMT
I think Diversification has one advantage - it is hard to guess what asset class will do well next year. So our assets are divided across all asset classes. Disadvantage is we will always do mediocre at best by definition.
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Post by roi2020 on Nov 2, 2021 19:54:20 GMT
David Snowball from Mutual Fund Observer (MFO) penned a good article about investment risks in China. Link |
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Post by Deleted on Nov 9, 2021 5:35:02 GMT
Some guy called Mark Mobius likes India and Taiwan. Has 22% allocation to India and 21% allocation to Taiwan in his fund.
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Post by steadyeddy on Nov 10, 2021 0:04:54 GMT
Some guy called Mark Mobius likes India and Taiwan. Has 22% allocation to India and 21% allocation to Taiwan in his fund. Mobius has always been an EM investing guy.. so no surprise here. |
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Post by steadyeddy on Nov 10, 2021 0:08:18 GMT
David Snowball from Mutual Fund Observer (MFO) penned a good article about investment risks in China. Link, thanks for sharing the link. I enjoyed reading a balanced view being presented there. |
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Post by jongaltiii on Nov 10, 2021 1:36:55 GMT
Before investing in the region, repeat after me: "common prosperity"... "common prosperity"... "common prosperity"
After tapping your feet 3x and repeating the above, you'll exit technology, luxury goods, education and entertainment and you'll enter energy, consumer goods and staples, healthcare and local tourism stocks. OR avoid the region altogether.
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Post by win1177 on Nov 10, 2021 1:47:58 GMT
David Snowball from Mutual Fund Observer (MFO) penned a good article about investment risks in China. Link , thanks for sharing the link. I enjoyed reading a balanced view being presented there. Sobering look at the risks of investing in China. Thanks for posting roi2020! Makes me wonder if I should go ahead and sell my BABA position, which is underwater??? China seems bound and determined to “intervene” in successful companies. Win |
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Post by steadyeddy on Nov 10, 2021 2:04:09 GMT
China real-estate implosion, and the associated spillover effects on the global financial assets, is the BIGGEST risk I foresee in the next 12 months.
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Post by chang on Nov 10, 2021 2:24:05 GMT
Would be interesting to check whether well-known LCG fund managers have reduced (or increased?) China holdings. Funds like TRBCX, FCNTX and numerous others often hold around 5-10% in China.
I wonder if that has changed from 1Q to 2Q to 3Q. These guys are pretty sharp.
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