This is an FH Premium post written last weekend.
As I have been getting a lot of questions on my views on China, I wanted to make this post available to all readers.
Hopefully it would help you when deciding whether to invest in China.
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Okay so 2 key topics I wanted to discuss.
The first is on China, and whether China stocks have bottomed after last week’s policy action.
Second is a question from a reader on the outlook for Tech stocks and when to cut losses.
For ease of reading (and given the length of the article), we will focus only on China today.
And we’ll talk about Tech stocks tomorrow (article here).
Have China stocks bottomed?
To recap the timeline (as shared in discussions in the Private Telegram Group last week).
When China unleashed large monetary stimulus on Tuesday, I was somewhat sceptical about whether this marked a policy bottom.
Investors have been once bitten twice shy calling the bottom in the past, so why would this time be any different.
However it was the fiscal stimulus announced at the Politburo on Thursday that changed my mind.
The fact that Beijing coordinated fiscal and monetary stimulus literally the weak after the Fed rate cuts, and the language / way in which they did it.
Led me to form a preliminary view that the worst of the China policy situation may be over, and policy makers may shift towards a more constructive stance towards the economy going forward.
In any case, I know not everyone agrees with
