Whose opinion should we give more weight to? The Armchair General calling tactical moves from behind the lines or subaltern’s in the field engaged in the day to day struggle? It’s a moot point. From time to time views from both are likely to be useful. What’s probably not a good idea is to rely […]
Author: Nial Gooding
I’ve said many times ‘China isn’t near half-way done’; but the paper I’m highlighting this week, from Justin Yifu Lin and Fan Zhang, both professors at Peking University, suggests I’m wrong. China may not even be near one-third done. They take a simple metric, China’s per capita GDP as a percentage of the same number […]
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Dare We Be Bullish About China?
In September 2014 I wrote about China heading toward a hard-landing Hard-Landing; and that sort of happened. I wrote again, in September 2015, about how we seemed to be then navigating a bumpy-bottom Bumpy-Bottom. I’m wondering now, is it time to start being more constructive? Summary Conclusion To be clear, when I talk about China […]
The issue of higher education in China is one I have no push-back on to the view that it’s poor, globally not competitive and showing little signs of improvement. I’ll argue happily about the soundness of the financial system, the track record of the Chinese Communist Party or the long term value of infrastructure spending; […]
The authors of this paper are at pains to point out that nobody, themselves included, can give a categorical answer to the headline question. However Jingyi Jang and Kei-Mu Yi, in this recent paper from the Federal Reserve Bank of Minneapolis, have a stab based in part on the Japanese and Korean experience. Bears will […]
In financial markets a not understood pattern of behavior is often dismissed as a product of other operators’ foolishness. Why do people like penny stocks? They’re naive. Why do people think stock splits increase the value of a company? They can’t do basic math. Why do people buy gold? They don’t understand asset valuation; and […]
A number of people have approached China’s GDP figures via the backdoor of coincident indicators, most notably Premier Li Keqiang. Partisan work has been done concluding official GDP numbers must be a multiple of reality but in the very brief (a merciful 3-pages) paper highlighted this week from Jun Nie of the Federal Reserve Bank […]
It’s been widely reported that large numbers of ‘evangelical’ Christians in the U.S. are supporters of a racist, misogynistic, self aggrandizing, bully running for the Republican Party’s nomination as their Presidential candidate. How do we explain this apparent conundrum? I wondered, as I’m sure many do, so started some digging… Studies going back as far […]
Notwithstanding the fact that some of the biggest corporate frauds in history have been perpetrated in the U.S., and that accounting irregularities come up with a proven frequency more in U.S. companies than elsewhere, the US Securities and Exchange Commission, on June 9th 2011, issued a warning to investors about (effectively) Chinese ‘reverse-merger’ companies (we […]
I had the privilege of meeting Lawrence ‘Larry’ Summers a little while ago (OK, me and a roomful of other investors). I was rocked; sometimes you just know you’re in the presence of genius. Ever since I’ve thought he’s worth paying attention to. Since the GFC he’s been on a crusade to try and get […]
Would you give money to a manager who said their strategy was to buy dull stocks? You probably should; but the conundrum here is that no manager will advertise such a strategy as they’ll raise little money if they do. There is now however clear and growing proof that it’s a very sound course of […]
Monetary policy is based (in part) on the theory that interest rates affect the level of savings and investment and produces a so-called ‘IS Curve’ (IS for Investment Savings). In theory this line should slope down from left to right on a chart where interest rates are the left hand side and GDP is along […]
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Hong Kong – A Golden Era Ends
This is a longer note than I usually write but as I expect it’ll be the last piece I write on Hong Kong for some time I wanted to be thorough. Events in the last couple of years have convinced me the views expressed here will not need much revision. A self-destructive die has been […]
A study published in 2014 reached the comforting conclusion, for QFII operators, that foreigners bested local managers when returns in the domestic A-share market were compared. The study though wasn’t especially rigorous relying on annual observations which, since we’ve only had QFII since 2003, was a very small data set. In the paper I’m highlighting […]
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We Refute Mr. Bass (And Friends) Thus
If you have more than a passing interest in China no doubt somebody has brought to your attention a recent letter from Mr. Kyle Bass to investors in his fund Hayman Capital Management? [A friend sent me the link to the full text posted at ValueWalk which you can access here Kyle Bass Letter] Sticking […]
You’ve seen this image a lot in the last few months, or some version very similar. Bewildered (old or middle aged works best) retail investors with their heads in their hands. ‘What’ it seems to imply ‘were we thinking?!’. Or ‘I should have stuck to the ponies’ (which, BTW, you can’t in China). Yes folks, […]
You’ll need to print this out and read it carefully; but it’s worth the effort. In this 180-page tour de force Mr. Yi Wen of the Federal Reserve Bank of St. Louis’ Research Division and Tsinghua University deconstructs the British and American Industrial Revolutions to see what this tells us about China and it’s prospects. […]
Why is the West, and America in particular, so disliked, by so many in the Middle East (ME)? Constant meddling since oil was first discovered in large quantities has a lot to do with it. [Giving China a rest this week as I think we’ve had rather enough of it of late!] Over the Christmas […]
A twofer today. Not so much papers, more pamphlets. The first, from the World Travel and Tourism Council, highlights how important to the Chinese economy tourism is. They estimate by 2025 3% of China’s workforce will be employed in the travel and tourism business and that it could account for 10% of GDP at that […]
Summary Conclusion China’s financial market’s problems are home grown. As such weakness caused in other markets, especially China shares listed in Hong Kong, is unjustified. China will take time to fix broken systems; but that shouldn’t blind investors to the opportunities fumbling is producing. Preamble Complete understanding, of any market, isn’t possible; the knowledge would […]