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Most Crowded Trade - China - No Recession Here! (Patreon)

Published:
2023-04-16 01:37:35
Imported:
2023-04

Content

A month ago, I stated that China is likely the most crowded trade currently, and I faced backlash for it. 

However, recent events have proven my point. French protestors targeted the Paris headquarters of LVMH, the world's biggest luxury vendor, shortly after President Emmanuel Macron met with Chinese President Xi Jinping. As LVMH is heavily dependent on Chinese business, the timing of the protests is significant. Despite this, LVMH reported impressive earnings, driven in large part by the demand for luxury brands like Dior, Burberry, and Loewe in Asia. The fashion industry is experiencing a revival, fueled by China's economic growth and the anticipation of reopening, leading to nearly 20% growth in luxury stocks this year.

China Macro is Booming post C19 Reopening


What's also noteworthy is that out of the top 10 on the list above, I own four: GOOG, TSLA, META, and NVDA.

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Comments

Anonymous

Holy hell...I just realized that LVMH almost every store at the Short Hill Mall and Madison Ave!!!!!! I think my life just flashed before my eyes. I was thinking about picking up some LVMH a few month back and forgot about it. Guess I will be looking into it. Luxury does not fall to economic woes. (Even if I prefer first rate replicas.)

Anonymous

James - the assassin with compassion 🙏🏾♥️

Anonymous

Nothing surprises me anymore. Jim Rogers thinks we’ll get one more bull run , before we lose a few more spokes on the old financial system” wheel. Which seems to be breaking a bit more each year. Buckle in everyone, if you haven’t already. #timesachangin

Anonymous

A large population to support luxury items. When the Chinese economy thrives luxury items boom. Still amazing that one can buy a Rolex watch over there for $5. How do they do it ?

Anonymous
>>106457906

Some. It is a lot of the upwardly mobile or the nouveau riche. Real wealth doesn't blow money like that. In any case, people buy it rain or shine.

rscx

James doesn’t this point to weak breath on the S&P and Nasdaq as it’s being entirely carried by less than 10 names at this point? Those names have already rallied close to 100% into zones of resistance now. You’ve told us many times assets need to take breathers. If Google, Apple, Tesla, NVDA take a breather and they are all the gains, how will the market sustain this rally?

Anonymous

Interesting that you still own shares of META?

Anonymous

James- the thesis makes sense as there's so much wealth in China. Out of the entirety of the population, there's an estimated 300 million uppper & middle class citizens. That class is nearly as large as the whole population of the USA. It makes sense that China's social networks, luxury brands, foreign real estate holdings, etc. continue to climb. I think this is an important trend for all of us to follow as we watch the macro economic news and try to make micro economic gains for ourselves and our families.

Anonymous
>>106459595

I have been thinking about this too, and perhaps the breather is partly cause for restructuring who will be the new top 10 when AI hits hard. Firms are launching their AI Tools and teams to be first to market.

Anonymous
>>106469641

I have noticing an uptick of hiding/taking money out of banks in the last months or so for my friends in Malaysia and Taiwan. It is concerning that wealth is moving out of the banks and into assets like foreign real estate holdings during a time when real estate is in a bubble. It seems to speak to the thought that they may not be able to get money out of their banks soon and better off in property fully owned with title in hand. I would love to hear about the issues with eminent domain as of late. I could see that happening again in the next decade.

Anonymous

One of my besties lives in Paris and works in the fashion industry. She says that the LVMH incident was targeted more against people with money no against China. And they only were in the building for a very short time and they went into all kinds of buildings not just LVMH

Anonymous

Absolutely zero safety in China. They can step into any company any time. No better than Celsius or SBF. No thanks, James.

Anonymous
>>106459595

I’m also interested in James exploring this line of though. Has anyone posted this to the weekly Q&A?

Anonymous

My risk profile just can't handle China at present. Xi and that whole government are a loose cannon.

rscx
>>106459595

I can see what you’re saying but I think the time frames are different. For a breather, I’m thinking 2-6 weeks time frame. For a restructuring of the top ten that’s a multi year process. AI is great and fully believe it’ll drive a ton of value creation in the future but it’s to early in 2023 for AI to define the top stocks as so far it isn’t the profit driver in many business especially not the big one.

Anonymous

Thanks James - could you explain why not Microsoft and Apple? They're the biggest 2 and they've had enormous success with growth plans. So why not these 2 versus your current 4...

Anonymous

No the US is the most crowded trade, China is second. But should't it be that way, simply given market cap?