The Sunday Ride #6 – China’s Tech Crackdown

The Sunday Ride #6 - CHINA's TECH CRACKDOWN

The Sunday Ride brings a collection of Investment Research and Financial Independence topics for Long Term Investors with the aim of providing you the very best reads.

To be enjoyed with your Sunday post-ride coffee.

While rebalancing your portfolio, learn how the markets work and get the highest quality insights from Wall Street and Main Street.

Unlike the rest of Bankeronwheels.com, this series is provided without much additional guidance. 

As usual, everything is to be used at your own risk. 

Market Dashboard

DASHBOARD - STATE OF PLAY

A quick glance at where we stand Year-to-Date when you rebalance. Compiled specifically taking a Long Term Investor view. Updated throughout the year. Long term historical risk and returns are here

CURRENCY-ADJUSTED 2021 Performance

Realised Inflation has never been so high with Interest Rates so low.

Although I find Michael Batnick’s analysis somewhat misleading given he compares realised (over past year) inflation to forward interest rates (kind of comparing apples to oranges), but it’s worth highlighting nevertheless what exceptional year it has been and how low rates are.

β - THE LONG GAME

This section is dedicated to research on what really matters in the Long Run (aka the 90% of your Portfolio). Read about Asset Allocation and explore Index Investing Research.

 

What are the sources of COVID-19 related inflation?

US Data. Source: Thomson Reuters

Above is an interesting deep dive into sources of inflation from Reuters.

Global equities are now worth $118.6 trillion (Bloomberg Terminal screenshot below). No surprise here, it’s the highest value in history. 

It equals to approx. 140% of World GDP.

How overvalued is the market right now? 

The answer may be that given the level of interest rates seeing equities not overvalued would be even more surprising, writes Ben Carlson.

Source: Bloomberg

More Taiwan, less China? The rise of custom benchmarks

Custom indexation is on the rise. ESG, Taxes or Factors are some very valid reasons to tilt your overall exposure, according to O’Shaughnessy Asset Management.

S&P analyzes how you could tilt your Emering Markets Equity portfolio based on political risks.

For example, in their analysis Taiwan, Saudi Arabia, and Poland were the most heavily overweighted in 2020, averaging 14.2%, 1.0%, and 0.8%, respectively, in excess weight above the benchmark.

China, Brazil, and India on average carried a smaller weight in the Concept Index, underweighted 6.9%, 3%, and 2.5%, respectively.

If you’re curious about Green Bond ETF Benchmarks, FTSE Russell has gathered some insights.

Misreporting for Bond Funds may increase risks, according to the FT.

You probably witnessed it in your country. But it’s a broader trend. Pandemic fuels broadest global house price boom in two decades, writes the FT.

 

Alpha Investing

α - PUNT RESPONSIBLY

If you decide to sin, then sin only a little. Active investing should be, at best, a tiny fraction of your portfolio (I tend not to exceed 10% of my portfolio). This section is dedicated research related to improving your knowledge about capital markets. 

 

The China Tech Crackdown and wider perspective on the Chinese Market

Aswath Damodaran makes an interesting deep dive (video above) into Chinese Tech Stocks in the context of the crackdown.

At the same time BlackRock thinks our allocations to China are, on average, too low and should be lifted, writes the FT

A “Blunder” according to George Soros and reported by the WSJ, with some more context on his stance from Zerohedge.

If you want to look at wider issues and individual Chinese tech firms’ price reactions, Aviva has a good analysis

In an age of digital assets and various portfolio diversifiers, it’s good to go back to the basics.

Everything is a DCF Model – a reminder what is investing is all about from Morgan Stanley.

Crypto

French manager Melanion Capital is about to launch a UCITS Crypto ETF, according to the FT.

Except this isn’t really a direct exposure to the underlying, but rather correlated equities, like Bitcoin miners.

 

ACTIVE INVESTING - ORBITUARY

When you play with fire, you can get burned. This section is a stark reminder of what can happen when engaging in active investing, even as a professional.

They are not out of the game quite yet, but much closer.

Think about all those thinking investing in Bonds doesn’t make sense. Or putting money where their mouth is and shorting them.

Hedge Fund Alphadyne Loses $1.5 Billion in Short Squeeze, writes Bloomberg.

But you can also lose over 10x more in two days. Watch the Bloomberg video below.

 

European Stuff

EUROPEAN STUFF

This section is dedicated to UK and European Index Investing. It can also touch on other jurisdictions outside the Euro-zone.

French manager Melanion Capital is about to launch a UCITS Crypto ETFaccording to the FT.

Except this isn’t really a direct exposure to cryptos, but rather to correlated equities, like Bitcoin miners.

Degiro, a large pan-European broker, has introducted extended trading hours. 

You can now trade for longer hours, between 7:00 and 21:00, via the newly added Tradegate Exchange (TDG). With over 10,000 securities from around the world, Tradegate offers a wide array of products, including Irish, European and US stocks. It is owned by Deutsche Borse.

Cycling

LIFESTYLE

This section is dedicated to the FIRE Lifestyle Movement and Cycling Topics (bikepacking, touring and useful reviews)

Financial Independence & Early Retirement

Watch Why retirement Will Soon Be a Thing of the Past (video from Bloomberg above).

Hypocrisy and Manipulation – is the FIRE Movement corrupt? Asks MoneyFlamingo.

A sustainable way to Financial Independence? He hustled like mad in his 20s and now reflects on deciding how fast and far one should go. Here is Thewokesalaryman‘s take.

 

Cycling - TAKE A CHILL PILL

It’s really hard to fight against broader trends like racing in cycling. Or that it’s not about the bike.

I like Road.CC perspective on it. It’s not all about racing: why the bike industry needs to take a chill pill.

It’s like comparing the Tour de France riders to a bikepacker like Max Schnell. An interesting take that you can read in L’Equipe (in French).

It never gets easier, you just get faster

- Greg LeMond

Good Luck & keep’em* rolling!

(* Wheels & Dividends)

ALL INVESTING GUIDES

GROW YOUR PORTFOLIO
PROTECT YOUR MONEY
CHOOSE THE BEST ETFs
BEFORE YOU INVEST CHECKLIST
Market Dashboard
MONTHLY ROUND UP OF PORTFOLIO RESEARCH
YOUR INVESTING QUESTIONS ANSWERED
UNDERSTAND BOND ETFs

DISCLAIMER

All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries or suggestions expressed or implied herein, are for informational, entertainment or educational purposes only. The information provided on Bankeronwheels.com is general in nature only and does not constitute personal financial advice.

Before acting on any information contained on Bankeronwheels.com you should consider the appropriateness of the information having regard to your objectives, financial situation and needs, and seek professional advice where appropriate. Read the terms and conditions.


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About Raph Antoine 75 Articles
Raph Antoine is a Portfolio Manager and Institutional Advisor that witnessed first-hand the 2008 Great Financial Crisis and the 2011 European Debt Crisis working for some of the most prestigious names in the financial industry. Raph has experience across multiple asset classes including Fixed Income and Equity products as well as bespoke Investment vehicles in multiple jurisdictions. Raph holds an MSc in Financial Engineering and is a CFA (Chartered Financial Analyst) Charterholder. He usually rides one of his two bikes. Rarely, a Canyon Ultimate CF SLX 8.0 (that is currently in family's attic) and most of the time a Gravel Pinnacle Arkose (his favorite) that he used to Cycle the World.
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Mrs. Flamingo
1 month ago

Thanks for the mention! ?

Richard Smith
Richard Smith
1 month ago

Alternative crypto etf in the UK. VanEck Vectors Digital Assets Equity UCITS ETF

Last edited 1 month ago by Richard Smith
Joao Jesus
Joao Jesus
1 month ago

Very interesting links, as always. Thank you so much.