Category: Thoughts

One of the sillier stories in recent weeks has been about the debt of the China Railway Corporation (CRC) being twice as large as Greece’s. The observation being irrelevant of course without some discussion of what’s on the other side of the balance sheet. In Greece’s case not a lot; we are and should be […]

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 […]

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 […]

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 […]

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 […]

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 […]

[I took a new-ish book for company on this visit; Ghost Cities of China by Mr. Wade Shepard and it’s the best, most informed and sensible work that I’ve seen on this issue. It’s an easy read and if you care about the subject I commend it to you highly. More at http://www.amazon.com/Ghost-Cities-China-Populated-Arguments/dp/178360218X] Introduction I […]

There’s no reason why views of the future need be timed to coincide with either the moon’s rotation about the earth or the earth’s rotation about the sun. Nonetheless, fund managers write monthly letters and seers in general think loudest about the future around this time of year. Having noted the above, and because it’s […]

Over the weekend of July 4th and 5th this year the Chinese government panicked. A raft of measures were announced to try and halt the slide in the domestic stock markets and in the following week over half of the stocks traded in the Shenzhen and Shanghai markets were suspended. The Shanghai stock market, at […]

Almost exactly a year ago I wrote about the hard landing then taking place in China [China Hard Landing. September 2014]. It’s been therefore interesting to see variations of this same analysis presented in recent months as new or unexpected when, in fact, its neither. If we knew a year ago that China was hard […]

In the last couple of months the Chinese stock markets reminded me of an old joke. A sinner is sent to Hell and told to choose eternity behind one of three doors. She asks to have a look first before deciding. Sure says the Devil and shows her the first option. In the first room […]

China’s stock markets have been noisy places of late. Take a step back though and nothing that remarkable, in the context of what markets are regularly observed to do elsewhere, has taken place. I believe schadenfreude on the part of the doubters, the majority of international investors, accounts for much of the amplification of what […]

Preamble I wrote earlier in the year I didn’t believe China stocks had entered a bull-market; and that’s still my view. To be clear what I meant then, and now, is China stocks have yet to capture the interest of a sufficiently broad group of investors to allow for the kind of self-sustaining momentum that […]

[I was in Chengdu and Chongqing last week looking at property with Ms. Nicolle Wong of CLSA and her China property team as my guide.] A look at a regular map of China makes you wonder why Chengdu and Chongqing are described as being in the West? To the casual observer they look sort of […]

[I’ve just spent the last week as a guest of CLSA at their China Forum. First in Chengdu then on the road in Chengdu and Chongqing specifically taking the pulse of the local property market. Especial thanks to Ms.Nicolle Wong and her team for the property leg.] No other place on earth has so many […]

Preamble A few years ago there was a craze for ‘do-it-with’ jokes. Only the very naive would have failed to recognize do-it as a none too subtle euphemism for, well, doing it. This produced some quite amusing one liners. Organization theorists do it loosely coupled, for example; and some really sad ones. Monte Carloists do […]

The reality of events in China in the first quarter was that not much happened. The results season was a ‘meh’, underlying trends in the broad economy remained mixed and the anti-corruption campaign continued to affect decision making contributing to the new normal pace (slower) of economic development. So what’s with these fizzy stock markets? […]

Preamble A few years ago in China’s stock markets the retail/consumer sector was the hottest. Rising incomes, a huge population, what could go wrong? For investors in the space the bet has proved a poor or disastrous one depending on where it was placed. That such a sure-thing should have turned out so badly should […]

Preamble The last time (and I’ve sworn to never do it again) I was foolish enough to call the market was October 2010. At that time I confidently wrote we were most definitely and without a doubt entering a grand bull market. What a putz! That call was followed by the annus horribilis of 2011. […]

Preamble Nobody knows what determines the overall level of stock markets in the short term; and the short term can sometimes end up being several years. We know though that in the long term underlying earnings trends of the companies that compose an index must, ultimately, be reflected. It should come as no surprise then […]