Why Western Media Stays Unfavourable on China | Australian Markets
As an investor, it’s important to keep away from biased narratives. I see a lot of unfavorable reporting on China. It’s time to recognise China for what it’s and the chance it may offer for traders.
Yesterday, I put collectively a piece in Fats Tail Each day on the potential pivot from US Tech to commodities… The place relative values may start to align with historic norms.
A key cause why traders must be specializing in undervalued useful resource shares.
You may revisit that piece right here.
And Monday’s dramatic market motion undoubtedly added to that concept.
The world’s largest listed company, Nvidia, fell 17% on Monday.
Shedding $600 billion in a single day of trading!
However as I identified, what this latest development exhibits is the gradual unwinding of US dominance.
You see, America is already dropping the race in high-end manufacturing, similar to automotive, Li-ion batteries, renewable applied sciences, and even building parts for nuclear reactors.
China has catapulted forward.
In the meantime, America and the West misplaced their pursuit of securing provide chains of uncooked supplies years in the past and are unlikely to ever regain them.
That’s as a result of China dominates extraction and processing because of its huge community of highways, railways, and transport lanes connecting Asia, Japanese Europe, South America and Africa. Forging partnerships that will probably be troublesome to interrupt.
And as this Reuters article exhibits, China is transferring forward with fusion energy, a path that would place this manufacturing giant as fully energy-independent.
And now, China seems to have added one other feather to its cap: probably leapfrogging the US within the international AI ‘arms race.’
Why Buyers need to look East to any extent further
China is taking the West to process, and I can’t see any cause why this pattern will gradual down.
That’s why you need to look past the superficial reporting on the Chinese language financial system.
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Like this text from the ABC final yr, reporting on ‘Beijing’s financial oblivion.’
The narrator’s downbeat outlook on China finally led to his bearish tackle iron ore, aluminium, and copper.
That was in July 2024, a time of depressing sentiment within the useful resource sector and a main low within the market. It was a prime shopping for alternative!
At my paid readership group, we purchased a number of copper performs and an iron ore miner during final yr’s mid-year low.
And we have been ready to do this by trying previous the biased reporting on the Chinese language financial system.
Given how important this concern will probably be within the years forward, I counsel you begin totally different viewpoints to what the mainstream gives.
In fact, that’s what we offer right here at Fats Tail!
However over the approaching weeks, I’ll be sharing different sources that I feel it is best to learn or take heed to.
One of these is Louis Vincent Gave.
Louis runs an investment analysis firm out of Hong Kong and is acutely conscious of the alternatives on this half of the world.
My colleague, Greg Canavan, occurred to chat with Louis final yr, and you may revisit that interview right here.
Lastly, I simply wish to go away you with this, one thing I wrote in Fats Tail yesterday:
‘Going “all-in” on America has been an excellent trade over the last 80 years.
‘But Asia now looks set to take an increasingly larger share of growth and, perhaps more importantly, global influence.
‘As an Australian investor, you should view this as an opportunity, not a threat.
‘As China emerges as the world’s largest superpower, I count on it’ll ignite the Asian sphere:
‘Indonesia, Thailand, Vietnam, Korea, and India will benefit from this “changing of the guard”—from US hegemony to a new central Asian superpower.
‘All this will be bullish for commodity demand as growth takes shape across the region.
‘As an investor, it’s time to look ahead.
‘The future is in Asia, and that’s how it is best to place your self.’
Till subsequent time!
Regards,
James Cooper,
Editor, Mining: Section One and Diggers and Drillers
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All advice is basic advice and has not taken into consideration your personal circumstances.
Please search impartial financial advice relating to your own scenario, or if unsure in regards to the suitability of an investment.
James Cooper has been a working geologist in mines throughout Australia, Canada, and Africa because the early 2000s. He’s led the operations of tiny explorers by to very large producer outfits. He’s seen booms and busts firsthand and he additionally understands the cyclical nature of particular person commodities. For instance, James was proper there when Barrick Gold launched an huge $7.5 billion takeover bid for Equinox. That was the height of the final cycle.
Along with his background as a geo and finance skilled, he brings a distinctive insight and expertise to Fats Tail Funding Analysis. He writes the broader resource-focused investing letter Diggers and Drillers and the ultra-speculative explorer-focused trading service Mining: Section One.
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