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Frequent Contributor

Another nice day for MATFX - up 34% YTD and 47% in the last year. I feel a little queasy adding to it, but I’ve been buying every little dip. One more buy to bump it into MITEX and get a lower expense ratio.

I’m sure it’s going to take a hit at some point, but it could rise another 250% before that time comes. If China develops the vaccine first—don’t rule that possibility out—funds like MATFX, MPACX, etc. stand to benefit.

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Frequent Contributor

@NuEnglander wrote:

From what I have been reading lately, Biden might win in Nov. Policy towards China may change to a more passive approach. I am watching Japan, Australia and Europe as to how they are reacting to China's more aggressive military build up. There is growing concern on several fronts. Do not under estimate the EU, it is a huge market for China.



@NuEnglander wrote:

From what I have been reading lately, Biden might win in Nov. Policy towards China may change to a more passive approach. I am watching Japan, Australia and Europe as to how they are reacting to China's more aggressive military build up. There is growing concern on several fronts. Do not under estimate the EU, it is a huge market for China.


Im quite certain that equity investment style would need to change if Democrats took the election; emerging markets would flourish 

 

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Contributor ○

Biden wins and China and Russia start, I'd say spring of 2021 (they don't want to seem too enthusiastic) impinging on their neighbors. China builds more islands into South China Sea, impacting Japan and Vietnam. Russia starts playing with natural gas deliveries to Eastern European countries. 

Meanwhile, USA will be trying to figure out how much money to give Blacks for reparations for a terrible thing that happened 150 years ago. What do you think? $50,000 to each family? 

Russia, China North Korea and Iran will work to destroy the evil Satan. USA is in decline. There's no argument. Oh, and if the virus doesn't get us, China is sending seeds to unsuspecting people. You know 5% of them will get planted. Watch what that does to our wonderful natural resources. People are gullible idiots thinking China doesn't want to bring us down. 

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Participant ○○○

"Hard times make strong men. Easy times makes weak men."

The USA has had 100 years of "easy times".

Seriously. Would strong men ever even CONSIDER reparations to the RICHEST blacks in the world? Or the outrageous demands of the radical feminists?

Strong men would laugh at them. 

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Frequent Contributor

@galeno wrote:

"Hard times make strong men. Easy times makes weak men."

The USA has had 100 years of "easy times".

Seriously. Would strong men ever even CONSIDER reparations to the RICHEST blacks in the world? Or the outrageous demands of the radical feminists?

Strong men would laugh at them. 


I guess different people have different definitions of 'strong'. 

James Knew 

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Participant ○○○

These US actions regarding TikTok and Wechat seem rather minor from trade and investment perspective. I mean these just two apps so not that big a deal at all, or is it?

India already did such an action few weeks back.

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Explorer ○○○

Time will tell, but if we're creating two "competing" tech universes that might mean, eventually, two different markets.  One may be walled off from another by governments.  What's more, if companies start becoming pawns in the larger US/China Chess (or Checkers) match, where does that leave investor's money?

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Participant ○○○

Restricting Chinese companies to China is a wise and fair policy. It is called reciprocity. China also restricts outside companies. And concern around national security is real.

 

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Frequent Contributor

As long as China owns over $1 trillion in US Treasury bonds, the US is not going to do much more than posturing. If China starts to unload this debt, interest rates will go up—possibly sharply—and that’s something this Government certainty does not want.

Hence, I view these spats as dips to buy on. MATFX fell 2.2% on Friday, and if it looks like another down day on Monday I will add to it.

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Frequent Contributor

I added on Friday and will again on Monday if it falls further. Each time I BTD it is almost always at a higher price than the last buy. China- Innovative-Technology, what's not to like?

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Explorer ○○○

@chang wrote:

As long as China owns over $1 trillion in US Treasury bonds, the US is not going to do much more than posturing. If China starts to unload this debt, interest rates will go up—possibly sharply—and that’s something this Government certainty does not want.

Hence, I view these spats as dips to buy on. MATFX fell 2.2% on Friday, and if it looks like another down day on Monday I will add to it.


I agree that this is a reasonable thesis for the next five years, and likely profitable.  Both the U.S. and China have a great incentive to keep the relationship at a simmer rather than a boil.  However, we assume that political calculations will always be rational and that cost-benefit calculations won't change.  On those two points, I'm less sure.

I don't think China will telegraph the moment it can afford to move away from holding U.S. treasuries.  They know they are beholden and want to create an independent economic/financial/technological system.  Whether they will be successful long term, who knows.  But, if we all know that's their ultimate long term goal, then what's the incentive for a U.S. based investor to tie up capital there long term? 

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Participant ○○○

The other side of argument is if US can pump 3T for covid, why is 1T in debt held by China any problem? Debt is only a problem if it is held in others currency. As this debt is all in USD, it is not a problem of US, it can only be potential problem for China.

Also with rates near zero, some rise in interest rate does not sound like a big problem to me. And China off loading this debt will likely take a loss or at least an haircut on current price to sell it quickly.

(Note: I do not have expertise to say if this argument is correct. But sounds really logical to me)

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Frequent Contributor

@unbiased2020 “If you agree with the government's vision, then please invest there.  There is NOT ONE investment in China that does not support the Chinese government.”

I don’t invest to reflect my politics. I invest to achieve a good rate of return. Letting your politics get mixed up with your investments is usually a bad idea.

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Frequent Contributor

@waffle “The other side of argument is if US can pump 3T for covid, why is 1T in debt held by China any problem? Debt is only a problem if it is held in others currency. As this debt is all in USD, it is not a problem of US, it can only be potential problem for China.”

I disagree. China has only to intimate that it will dump a trillion $ of US debt to start some people panicking about rates rising. It doesn’t take a lot these days to move the markets, though perhaps temporarily. Trump does not want any stock market panics before November, of that I feel fairly confident.

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Frequent Contributor

Added to MATFX today. It closed down 1.5%; less than I expected, since its top holdings were all down 2-3% when I checked early in the session. But combined with Friday’s 2.2% drop, that constitutes a diplet.

Asian markets are up nicely at the moment (11:30 AM HK-time).

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Explorer ○○○

@chang wrote:

@unbiased2020 “If you agree with the government's vision, then please invest there.  There is NOT ONE investment in China that does not support the Chinese government.”

I don’t invest to reflect my politics. I invest to achieve a good rate of return. Letting your politics get mixed up with your investments is usually a bad idea.


You're right, my statement was too strong.  However, I do think it's valid to assess political risks with investments as these are threats to capital loss.  It's also true that the Chinese government has a massive grip over all entities operating within its territory.  So, while I believe there are political risks with investing in China based on the now-troubled US/China relationship and the current direction of the Chinese government, staying focused on the facts, not my occasional biases, will be more useful for the conversation.

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