Free trade
It works fine for the
multi-national corporations (and the investors) and the world’s consumers by
producing the best products from the best components from all over the world
with the cheapest and educated labor force.
China’s advantages
·
All low-wage countries such as India have labor
cost advantage. Most cannot compete with China as the government has not
provided infrastructure such as electricity and roads to bring the products to
the port.
·
Dying and working is a choice for some citizens
in many countries, but not for today's China unless you are a Chinese basher.
·
If they can send man to space, most likely they
can build a good toaster. China needs brand names to offer these products at
higher prices.
·
China's success is due to government policy and
hard work of her citizens. The lifting of embargo 35 or so years ago started
the process. Uncle Deng had the vision and it worked.
·
China is moving to the next phase of a developed
country. It has happened many times from Japan and South Korea. However, we
have not seen this scale yet.
China collapse?
Germany learns the problems with
refugees. It is late but better than never. If they do not fix the problems, it
could collapse.
The collapse of USSR is also due
to the temporary low prices of the energy and lumber and other resources
Russians depends on after the huge military expenses.
China does not have to keep up
with anybody but herself. If you have been to China in the last 3 years, you would
not think it will collapse. I have heard this 10 years ago, 5 years ago and
even 1 year ago. It has not happened so far.
Free trade
Free trade works if all parties
play fairly. You do not want to grow sugar cane in Alaska or dump the chicken
feet (a Chinese delicacy) to the ocean. US has been treated unfairly by her
trade partners for a long time and Trump finally stands up at the risk of
losing a lot of votes.
1. Deficit
with China is huge but exaggerated. Take out the components that are not made
in China and the design costs. Include the Chinese tourists, college to
Chinese, our product profits in China such as cars and phones that are
assembled in China and our fast food chains... and that should cut down the
deficit.
2. Banning
core technologies to China is not a long-term solution. If you understand China
more, the rise of China is not avoidable now. Need to be codependent and
co-benefit.
3. Take
out the barriers of our products to China.
4. Check
why we're not competitive in some sectors. We cannot solve the lower wages from
many foreign countries.
Many of the above are relevant to
Canada, Mexico and EU.
Close our doors to all trades
We can tell the world we do not
want to trade any more. US is one of the few countries that can do so. We would
enjoy a $50 toaster and the house price would appreciate due to lack of
Canadian lumber.
Pruitt resigned
How many Trump's top officials
have resigned? Shame, greed, sex and the press all play a role in many cases.
All high-profile politicians are scrutinized and our free press is always
finding juicy materials.
Tariffs
Tariffs on 500B Chinese goods vs
50B on US goods. We've the upper hand.
Even with the tariffs and
depending on the rates, Chinese goods would still be competitive and hence the
consumers will suffer. Tariffs are a kind of tax. The Chinese auto components
also make our cars more expensive and same for the lumber from Canada.
Embargo
Embargo used to work when EU were
our puppets.
British stocks
You have been warned a long years
ago not to buy and/or unload British stocks. Many do not agree with me. See
what will happen when the massive exodus of corporations to EU would happen.
China and trade war
China will lay out the long term
solution to US trade wars. The two countries are co-dependent and should be mutual
beneficial on trades as illustrated in my book "Can China Say No?"
She can in 10 years or so but not now.
Two different
investors
Speculators buy the trend and investors buy for the long
haul.
In another words, speculators
base on momentum and investors base on value.
Or, it is short-term trade vs. long-term trade.
Both can make money if they are good in either strategy.
Check out my books “Buy high and
sell higher” and “Buy low and sell high”.
Misc. news
Have not heard of CA for a long
while. They are into mainframe software and mainframe has been declining for
more than a decade. The fundamentals look great.
Small jet planes may have no
future. Boeing is smart not to invest themselves. The Brazilians and Canadians
take note. Last month, I took one using propellers from Boston to Toronto. Nice
view in low altitude. I prefer to go to first class than flying my own jet for
safety if I have money to throw around or tax write-off. Many major airports
have been too crowded.
Why FB got fired from a country
that has no effect on the Cambridge Analytica? Could be the name Cambridge.
ZTE can breath easier and
concentrate on its 5G research. China will speed up the core technologies. In
10 or so years, China can say No to us.
Jul 12, 2018.
Yuan appreciates
I remembered I got 8 Yuans for 1
USD years ago. Today’s 6.67 is still low compared to before.
Higher Yuan is good for tourists
to China (bad for tourists from China), good for Chinese export (bad for our
export to China), bad for Chinese in buying our companies, good for Chinese
debt payback...
Every country 'manipulates' her
currency.
Trump and NATO
The sucker who is on a diet
always picks up the dinner bill for the other fat guys and the two ladies. No
more sucker! No more Mr. Nice Guy!
Jul 12, 2018.
EU
EU depends on energy from Russia.
Pipeline is the best way to transmit oil and gas to EU from Russia.
Why we defend EU, Japan...whose
wealth is about the same as ours? It made sense in the past but not anymore.
Our leaders have closed their eyes too long.
A hug for a better world
I hope Trump and Xi would hug
each other and declare victory. A trade war cannot be good.
Xiaomi
Is XI #3? By volume or by dollars
in sales (not by profit for sure)? Or Chinese brands only? If they have not started
research on G5, they are too late even with all the money in the world. From
the fundamentals, it is not a buy to me. Potentially, it might.
Their phones cannot be marketed
in the US as they're too similar to iPhone (at least in the user interface).
Jul 10, 2018.
Surface Go
I do not think Surface Go can
compete with PS4 or iPad.
RIP Surface Go (to hell). What a
waste of money to market an inferior product without looking at the details. Do
market research first.
Tablets were originally
commercialized by Microsoft and they had their version of iPod. You need
passion to create a worthy product, not just filling the management's objective.
When they do not learn from history, they will repeat history.
Jul 10, 2018.
Trade war effect
I wonder what will happen to our
companies including Starbucks, McDonald's, GM and Ford who are doing business
in China in the potential trade war. With the new tariff, Tesla will have a
hard time to compete with Chinese cars in China even assembling the cars in
China.
Ford's and GM's profits in China
are more important. It could have saved GM from bankruptcy that would cause US
esp. its investors a lot of money and jobs.
Jul 9, 2018.
Mobile phones
The ranking of mobile phones is
interesting. It is by volume, so Apple is #2 behind Samsung.
China has several in the top 10
including Huawei, Oppo, Vivo, Xiaomi, ZTE and Lenovo due to her huge internal
market. LG is #9. Alcatel is #10 indicating EU is losing the market share.
Xiaomi has the poor timing in listing
its stock in Hong Kong. It needs cash for research and development against its
competitors especially in the 5G products.
Jul 9, 2018.
Cruise ship profits
The two factors:
1. When
the baby boomers cannot enjoy trips that are physically challenging, cruises
are better for them.
2. Asian
cruises are getting more profitable with the increasing middle class esp. from
China.
The neutral:
1. They
try to squeeze every penny.
2. Quality
of entertainment and food are both decreasing for making extra bucks.
Jesse Livermore
He could be our greatest trader
in our generation. However, he died almost bankrupt, committed suicide and
called himself a loser (from my memory).
It is better to be a turtle
investor as described in my book "The Complete Art of Investing".
Click here for more info.
----
The above is from my book "On Business News 2018" available from Amazon.com. 415 pages (6*9).
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