China is Overrated, and I Genuinely Hate David Tepper
A week ago-ish, David Tepper got on CNBC. He said that you should buy “Everything... ETFs, I would do futures, everything” in China. Before I explain my violent hate for this strategy, allow me to explain my violent hate for David Tepper.
David Tepper owns the Carolina Panthers, my team. My family is incredibly dedicated to the team. My grandfather got season tickets in their inaugural season (1995), and next year will be our family’s 30th season in a row, in those seats. There have been some ups (two Super Bowl appearances, all of Cam Newton) and some downs (pretty much everything else). In my 17 years of loving this team, I have never felt such apathy for the Panthers. It invades every sense around the team. There is no future, there is no plan, and as my other grandfather would say, Davie is just a Yankee in every sense of the word. He is smarmy, egotistical, supposedly all-knowing, and completely incompetent. He has NO CLUE at all about anything he is doing. There are few men alive today whose names I know on this planet for which I hold more hate. Here they are in order: Vladimir Putin, Donald Trump, and Xi Jinping. That last man is the subject of our conversation today (fuck you, David Tepper).
I am becoming genuinely angry at this man right now, so we are just going to call him Investor X. Actually, that’s too cool. We’ll call him Dipshit #1. Dipshit #1 thinks that China is great. He thinks that China is the absolute #1 place to be right now in this world for investing. Dipshit #1’s strategy mostly surrounds the concept of not fighting The Fed. The Fed in this instance is China’s federal reserve, which began lowering rates a week or two ago. His three largest positions are Alibaba, PDD, and Baidu, which were down 7%, 6%, and 8% yesterday on news that the Chinese government which has resisted stimulus forever, would be releasing mediocre stimulus.
Here are a few structural reasons why this investment is destined to fail:
First, Chinese stocks have always sucked. If you invested $1,000 in China in 2009, you would have today…$1,000. If you invested $1,000 in China in 2015, you would have today…$1,000. If you invested $1,000 in China in 2001, you would have today…$1,500. Past results obviously do not guarantee future ones, but I fail to see why this is any different. The market hasn’t imploded or anything. Since this time five years ago, the market is up 10%. It is doing what it always does, stay flat. Chinese stocks always suck.
Chinese stocks are always bad eventually because of our second reason: too much government involvement. Alibaba could have been a great company if the company’s visionary CEO, Jack Ma, HADN’T BEEN KIDNAPPED FOR THREE MONTHS. The Chinese government is completely unserious about advancing in terms of not being completely psychotic. All spending is basically government spending. Their new subsidies for tech industries will go into corrupt pockets, and the limitations will be too intense to allow for any genuine growth. In short, the government is too involved. In some ways, this is a good thing. In terms of making public investments pay off, this is entirely bad.
Third, these guys are Commies. I am no Joseph McCarthy, but the CCP is morally bankrupt. I’m not saying that we are perfect, but the CCP is a reprehensible cartel bent on authoritarian domination of their people, Asia, and the eradication of the Western World. The CCP cannot be trusted to be open to Western investment, Western companies, or even to their own companies. The CCP only serves the CCP. Whatever discount you are getting on Chinese stocks is worthless. You will not get rich off the Chinese.
Fourth, the Chinese consumer can not be trusted. This is a country reeling from an economic crisis. They just had a real estate market, over a third of their GDP, implode. All of these companies were government-backed. How are they going to afford these massive stimulus measures? They cannot trust their own companies to not suck. They do not have the infrastructure spending they have relied on for years. They will have to ride this out and enjoy their time as the next Japan (shout out to my Japanese homies). The Chinese government and the Chinese consumer cannot be trusted to fund this explosive growth. There is no money to turn this around. THE CHINESE PEOPLE ARE BROKE. THEY ARE NOT BUYING ANYTHING.
David, if this somehow finds its way to you (please God grant me this one wish. Please let David Tepper read this), please sell the team. I beg you. David, sell the team and go back to New Jersey, your ancestral home.
I will say this, Taiwan is an independent country (shout out to my boy Victor, AKA, my only Taiwanese friend, who I play Fortnite with every month).
