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Investment Outlook

Goodbye SoftBank Vision, Farewell Ark Innovation, and Hello Berkshire Hathaway

Our title this month reflects the theme we discussed in April that the world has changed, in that the list of high-tech internet names, owned by Masayoshi Son and Cathie Wood, are now rapidly falling to earth.  Netflix has been the most recent, and dramatic, example, losing 50% of its value after it reported a loss of 200,000 subscribers.  Trees do not grow to the sky, and the valuation of

THE WORLD HAS CHANGED

Since before the start of the Russian invasion of Ukraine on February 24th, investors had already begun to adjust from the high-priced growth model of internet-related shares, which powered performance in the last 2 years, to a more value-oriented portfolio of “physical” businesses, such as oil, shipping, trading, and retail businesses.  The bubble in US shares and property is now set to be corrected within months by rising interest rates. 

Kyiv and Hong Kong

We are watching the Ukraine situation daily and the outcome is still uncertain. The market has reacted sharply on the day of the invasion, February 24th, with gold and oil rising and most shares correcting. It is therefore not clear what the impact on Asia will be, although Europe is much more affected by the possible interruption in natural gas supplies. However, the resistance put up by President Zelensky and

Oil & Gold Rising: China Outlook

Inflation is now running at 7%, and it remains to be seen if this is a “transitory” trend:  even if supply chains clear, as the pandemic winds down globally, wage rises and commodity prices are still important factors.  Oil is at $87 a barrel ($90 for Brent), and we forecast $120 to $150 a barrel within a year, based on supply constraints.  We are trying to “oil proof” our Bamboo

2022 Themes and Forecasts

The global market continues to be buoyant, despite the Omicron variant, with savings and capital flows strong, corporate profits high, and investor sentiment remaining positive – though much more in the USA than in Europe or Asia.  The megatrends in technology are driving innovation and R&D in cloud computing and e-commerce leading to a digital transformation of global economies – for instance, in Southeast Asia, which is now rapidly catching

GREEN SOLUTIONS

There is little doubt now about the weather changing and becoming more extreme, but there is still a lot of debate about what, if anything, humanity can do about it collectively.  The consensus is that it will take at least 30 or 40 years to replace all automobiles by electric vehicles, and for wind and solar to replace oil and gas.  Much harder, but one rational solution is to build

“ONE MAN’S VIEW OF CHINA”

Dear Colleagues, We have recently been in contact with an investor who is trying to make sense of the current situation between China and its global relationships.   In response, one of our associates put together the following observations, some of which we thought might be of interest to our investors.    We emphasise that these opinions are just the personal thoughts and opinions of an associate of our company, and

THE BEST 25 COMPANIES IN ASIA

In the midst of constant shocks and surprises from the Chinese regulators and government, we are moved to return to our basic philosophy of selecting the best 25 companies, not only in China, but in India, Korea, Taiwan, and Southeast Asia, with the best management and corporate culture, the highest return on equity, and consistently high earnings growth.  This seems a refreshing change from constantly having to guess the next

ASIA’S CHANGING BALANCE OF POWER

The sudden fall of Kabul to the Taliban in August has shaken up the diplomatic and military balance across the continent.  Now that the Americans and NATO forces have withdrawn, the vacuum is almost certain to be filled by China, providing both economic and financial support for the Taliban, and Afghanistan becoming part of President Xi Jinping’s “One Belt One Road” geopolitical plan.  The fact that the Russians, acting now

CRACKDOWN IN CHINA

Investors in Chinese securities have had successive shocks since the original postponement of the ANT Financial listing in Hong Kong last year, followed by a number of leading Tech Corporate Chiefs being questioned by the Communist Party and then, recently, by the abrupt crackdown on Didi (the Chinese Uber) after they listed in New York a month ago.  This has come to a head on the 26th July, with the

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