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China and Chinese
Companies
What do you guys make of what is going on in China? Xi
Jinpin sure woke up last October when Jack Ma made some remarks
that pissed him off.
Now the regulations have swept across many Industries, and it is
still unclear to me if Xi has his people’s best interest or
his own interests. Time will tell, I guess.
From an investing perspective, what is going on over there makes
it extremely risky to put too much money
there.
Recently, the Chinese government has tried to calm the waters,
but today they have gone after the online gaming industry, so
Tencent took an additional hit. So it seems they
are unable to contain their “I know better”
attitude. Big brother is watching you way of
controlling their country. So to speak.
Xi has made China uninvestable, at least until the waters
clear, and from what I can see it seems it could be a while
yet.
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Well, I bought BIDU in mid 160s and BABA below 200 this week.
Partly based on my belef that Xi Jinpin wants to
re-exert govt control, but not completely blow up their economy. So
I think these stocks have alot of value, but of course trying to
predict what will happen is a crapshoot. My thoughts are based on
how I perceive the world, and it is understandable that there is a
risk that Xi Jinpin doesn't see it that way.
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Author:
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breinejm
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Subject:
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Off Topic
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Sentiment:
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Neutral
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Date:
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08/06/21 at 10:43 AM CDT
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Some pundits here say there are two things at play in
China's play to regulate their own companies:
- Avoid the deep wealth disparities that the US has in
place
- Establish in a no uncertain way who is boss
After thinking it through for a while, I believe both are
true. The second may carry a bigger weight in Xi Jinpin's way
of thinking. It also involves having access and control over
the vast amounts of personal data being collected on the general
Chinese population. What they saw happen here in 2016 here is
an eye opener for any regimen, regardless of political
leaning. We have yet to have any control over
ours.
I think Xi Jinpin and his band of merry regulators may
still have a way to go. The Chinese economy has grown
tremendously precisely because it was allowed to, now they think it
went to far and a process to reign it in may take some time to
fully play out.
So, I think there will be more bumps on the road, and I
also think that the result of all these regulations will most
definitely cut some points off their GDP. All of these things
will cool off the growth of all internet related companies over
there.
Alibaba for example always had a "China Discount" on its
multiples. Now that discount has been increased as investors
adjust the risk to a higher level due to all these recent
developments.
While the company must definitely is an amazing company
with exceedingly good management, it has little control over what
the communist party wants or can impose.
All that said, I do believe that there is a chance over
the next 18 months that its stock price can rise to a multiple in
the mid 20s. However, I say this cautiously as
the Chinese Government’s power and control trumps anything
else.
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Author:
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LongTerm
CapGains
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Subject:
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Off Topic
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Sentiment:
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Neutral
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Date:
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08/07/21 at 5:37 AM CDT
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Yeah, I cannot strongly disagree with anything you said. I
probably should wait and see, but the prices of some china stocks
look really inviting. I don't have any large positions, so can buy
more if it drops or sell for a small loss - likely the latter if it
comes to that. I'll wait and see for now.
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Author:
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breinejm
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Subject:
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Off Topic
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Sentiment:
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Neutral
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Date:
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08/09/21 at 5:30 PM CDT
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Author:
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LongTerm
CapGains
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Subject:
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Off Topic
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Sentiment:
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Neutral
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Date:
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08/10/21 at 8:19 AM CDT
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