If there ever was a time when you could see a trend solidly in motion, now is it.
💻 TO TECH, OR NOT TO TECH?
Staying with China for another moment… sometimes knowing where not to be is just as important as knowing where to be. After all, all investments are a matter of opportunity costs and probabilities. It’s why we’ve been curiously watching the implosion of Chinese tech stocks.
The way we put it in the most recent issue of Insider Weekly:
The Chinese tech regulatory issue has been going on for months, but the big question here is what is priced in.
What about the longer-term view? Is US tech any better?
In a previous issue I said that US tech manipulates and owns the government whereas in China the government manipulates and owns China tech.
That the two are diverging as much as they are is potentially important rather as a crack in the armor of “growth,” because let’s face it, US investors have been buying up China tech as if it’s the same as US tech. Clearly it isn’t. But the other question that is worth thinking about is what don’t US tech investors know about US tech? Do they still or should they still trust them to the extent that they do?
Well, you know my answer to that, but really what I think doesn’t matter because what the market thinks is what matters, at least for now.
⛏️ THE BAD BOY OF MINING
Right now there is nowhere better to be than copper. If you’ve been following us for some time, you probably know the world needs a hell of a lot more copper. And fast. The problem, however, is that we are not finding it fast enough.
It’s why our colleague over at Resource Insider, Jamie Keech, has been patiently hunting for investment opportunities in copper.
And he found a way to team up with one of the best operators in the mining industry (with a long history of making investors money), in a deal he calls “Project Black Sheep”. Curious to learn more? You can read Jamie’s thoughts on the deal here.
🚀 ROCKETS: THE NEW SKYSCRAPERS?
All jokes of manhood symbols aside (yeah, what a hell of a strange looking rocket), we reckon this is just one giant contrary sign. Call us old-fashioned but why the obsession of going to space? Isn’t that what man did some 50 years ago?
It reminds us of the construction of the world’s tallest buildings and how they often have coincided with market tops in the respective cities and countries. Yet another analogy would be large mega mergers and acquisitions. Simply put, at the peak of market cycles hubris kicks in and people get silly.
🤑 PENNY FOR YOUR COAL MINE
If you needed more evidence of how coal is seen as toxic waste by global investors (not just of the Western woke variety), Reuters reports that the number of bids for more than 70% of Indian coal mines up for auction was a fat zero:
India received no bids for 48 of the 67 mines up for sale as part of its plan to open up coal mining to private companies, reflecting little investor appetite for a sector clouded by environmental concerns and low margins.
Prime Minister Narendra Modi last year offered financial incentives to the private sector and removed restrictions on the end-use of the fuel in a bid to reduce imports and make India a net coal exporter.
India has the world’s fourth largest coal reserves and is the second largest coal consumer, importer and producer.
It is a reasonable bet that those companies brave enough to buy these (and other) coal assets will likely be buying them at “cents on the dollar”. We’ve been making a note of who is buying coal assets — not just in India, but globally. One of those (that we recently highlighted in Insider) is Vedanta. These companies are going to be buying bargains, especially if it is from “woke” firms offloading to achieve the politically acceptable thing.