Alex
shared a chat session in group #The Most Important Thing
[Prediction] after being pummeled for the last two years, the Chinese tech sector will outperform the US’s (as measured by KWEB vs QQQ)
China’s regulators are finally signaling that they’ve reached the end of a long anti-tech cycle. After breaking the shackles of zero COVID the central government is looking for ways to stimulate the Chinese economy, and needs its growth engines firing to generate growth and attract foreign investment back to China.
Meanwhile, the US will re-enter recession, quantitative tightening and rising interests rates will continue, the last bits of pandemic stimulus will expire (student loan payment moratoriums end soon), and new stimulus will be challenging to pass. US public equities will continue to struggle amid a strong dollar and increasing corporate debt defaults (as measured by returns to JNK and HYG etfs underperforming the average inflation rate)
In addition to broad Chinese tech outperformance at the index level, many long China short their U.S. equivalent pair trades will outperform in the next 9-12 months. Some ideas:
- long Didi vs short Lyft
- long Tuniu and Ctrip, short TripAdvisor
- long Meituan, short Doordash
- long BYD vs short Tesla
As an aside, I would avoid Chinese e-commerce this year given JD’s recently announced price war - this is going to hurt all 3 Chinese ecomm players badly
[Prediction] after being pummeled for the last two years, the Chinese tech sector will outperform the US’s (as measured by KWEB vs QQQ)
China’s regulators are finally signaling that they’ve reached the end of a long anti-tech cycle. After breaking the shackles of zero COVID the central government is looking for ways to stimulate the Chinese economy, and needs its growth engines firing to generate growth and attract foreign investment back to China.
Meanwhile, the US will re-enter recession, quantitative tightening and rising interests rates will continue, the last bits of pandemic stimulus will expire (student loan payment moratoriums end soon), and new stimulus will be challenging to pass. US public equities will continue to struggle amid a strong dollar and increasing corporate debt defaults (as measured by returns to JNK and HYG etfs underperforming the average inflation rate)
In addition to broad Chinese tech outperformance at the index level, many long China short their U.S. equivalent pair trades will outperform in the next 9-12 months. Some ideas:
- long Didi vs short Lyft
- long Tuniu and Ctrip, short TripAdvisor
- long Meituan, short Doordash
- long BYD vs short Tesla
As an aside, I would avoid Chinese e-commerce this year given JD’s recently announced price war - this is going to hurt all 3 Chinese ecomm players badly