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- 📈 Don't get this wrong | China’s capitalist experiment
📈 Don't get this wrong | China’s capitalist experiment
Here's what we've been learning over the past week
Equity Mates
June 09, 2024
This week on Equity Mates
Hey there Equity Mate,
We hope you’re having a lovely long weekend. Here’s some headlines that caught our attention last week:
GameStop is back (sort of), after Roaring Kitty posted on Reddit for the first time since the meme-stock mania of 2021. Roaring Kitty - who’s real name is Keith Gill - posted a screenshot on Reddit of a stake of 5 million shares in the company, worth $US116 million. The stock jumped 21% and sent his followers into a spin.
NVIDIA hit $3 trillion market cap, making it the second most valuable company in the world
Canada becomes first major economy to cut rates
P&O cruises will cease sailing from early next year, folding its operations into parent company Carnival Cruise Line
Citadel and BlackRock back project to start a national stock exchange in Texas, competing with the NYSE and NASDAQ
Monday - Disney: Investing ride of a lifetime or time to get off? | Company Deep Dive
Tuesday - Buy or Sell: Lucas Goode - Xero, NextDC, Brainchip + more
Thursday - Droneshield: 188% year-to-date - this company is flying | Company Deep Dive
Tuesday - How much did we invest in FY24 | Financial Check-up w/ Superhero
Your questions, answered
Darcy asked via email:
“What is one thing your clients often get wrong when they’re in their 30’s, that they’re coming to you for help with?”
We put Darcy’s question to Dylan Pargiter-Green , from Bold Wealth.
They don't start early enough. The biggest thing that people say when they come to us in their 50s or 60s is, ‘gee, I wish I had met you ten years ago’. The sooner you start, the smaller the things are that you need to do, to get to the larger position later on. It's really simple.
It always goes back to that very, very basic concept of compounding. It's like, well, if you start putting $100 a week away now, it’ll save you needing to put $2000 a week in 20 years time, just to catch up.
So yes, it's starting early, not being afraid to jump into something that's a little bit uncertain as well. Just do the thing that you are afraid of and in the worst cases you're going to get told to come back in five years.
If you have a question you’d like answered, hit us up at [email protected]
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What we’ve been reading
China’s capitalist experiment
The rise of China has been the economic story of our lifetime. For Australians, it has also been the rising tide that has lifted our boat. But since COVID it appears China’s economic approach has changed. Gone are the manufacturing-driven, export-focused years of 7%+ GDP growth. China now appears to be a more developed, consumption-focused economy.
This article is a summary of Wild Ride by Anne Stevenson-Yang. It picks up after Mao’s death and Deng Xiaoping emerging from the power struggle to lead the CCP. Mao’s economy was centrally-planned and repressive. Deng looked at his Asian neighbours - Japan, Korea and Taiwan - and their growth on the back of exporting manufactured goods. This was the start of China’s capitalist experiment.
From there it tells the story of China’s economic liberalisation. Of stock markets emerging, housing being privatised and the economy opening up to foreign investment. But more recently it also tells the story of China pulling back on parts of the experiment. The end of China’s real estate boom, moving away from certain areas of trade with the west and working to form a Russia-Iran-China economic bloc.
If, and it truly still is an if at this stage, China does reverse its capitalist trend of the past 40 years it will have huge impacts to the global economy. A market of 1.4 billion consumers will be harder to access, supply chains will need to be reimagined and huge amounts of foreign investment will need to find a new home. So it will be one to watch over the coming years.
In other words, Anne believes that China is withdrawing from its informal pact with Western nations about open trade, with the experiment in Western-style capitalism that commenced in 1979 over.