Breaking News

Someone said that China will take unspecified actions if Trump sends in US military troops to quell authorized protests of US citizens.  I don’t know who said it but someone on the internet verified it. I am 92% in cash so I don’t care if it’s true or not. This is in accordance with an ancient law: Do unto others as they would do unto you.

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The Other Side of the Coin

In an attempt to maintain a balanced approach to the conflict between China and the US, I recommend “Ill Winds” by Larry Diamond. He provides a well documented, scathing expose of China’s threat to the world as opposed to the views expressed in: “Has China Won”.

 

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Bad and Worst Case Scenarios

I have a 20.79? gain in my portfolio for the year and I’m taking it. Will the students riot in Hong Kong? Will China take control?  Is there a steer in Texas? Cash is an asset category!

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The Inmates are Running the Asylum

As of the open I am 37% in equity, 63% cash.

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Excerpts From: Has China Won

The author, KISHORE MAHBUBANI, was born to two Hindu parents in Singapore. He has had two distinguished careers, thirty-three years in diplomacy and fifteen years in academia. He lived in New York for over ten years as Singapore’s ambassador to the UN.

My comments are in Bold.  Mahbubani’s are copied verbatim from his book.

Mahbubani begins his book with several questions, such as:

“Is America making a fundamental error of perception when it views the CCP as a Chinese Communist Party? This would imply that the soul of the CCP is embedded in its communist roots. Yet, in the eyes of many objective Asian observers, the CCP actually functions as the “Chinese Civilization Party.” Its soul is not rooted in the foreign ideology of Marxism – Leninism but in the Chinese civilization.”

Is that a possibility worth considering?

On the subject of America’s attitude toward China he provides quotes such as:

“After speaking to several establishment figures with decades of combined experience on China , Greg Ip of the Wall Street Journal concluded : “ Yet if the pendulum swung too far toward accommodating China in the past , it may be rebounding too far toward confrontation now . ” Ip cites former treasury secretary Hank Paulson as saying: “We have a China attitude, not a China policy. … You have Homeland Security, the FBI, CIA, the Defense Department, treating China as the enemy and members of Congress competing to see who the most belligerent China hawk can be. No one is leaning against the wind, providing balance, asking what can we realistically do that has some chance of getting results that won’t be harmful to our economic and national – security interests in the long term?

AND:

“Bill Gates has decried the “paranoid” view fueling the current high – tech rivalry between the US and China . He said that trying to stop Beijing from developing innovative technologies is “beyond realistic.”  Huawei, like all goods and services, should be subject to an objective test.  The rule that everything that comes from China is bad … that is one crazy approach to trying to take advantage of innovation.”

Should that give us pause for thought?

Mahbubani ends his book with this conclusion:

If America and China were to focus on their core interests of improving the livelihood and well-being of their citizens, they would come to realize that there are no fundamental contradictions in their long-term national interests. The final question will therefore not be whether America or China has won. It will be whether humanity has.”

A sobering thought.

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A Must Read For Keen Insights To The China Problem

The book is:Has China Won? by Kishore Mahbubani.  Very well written and I agree with his monetary analysis. Here is a very controversial, but well reasoned, view of the conflict between America and China that will make you think.

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Mission Accomplished

Portfolio Navigation produced a profit for the year of 10% and I am now 49% in cash.

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Portfolio Navigation Says Reduce Exposure

I am starting to take profits in skyrocket tech stocks.  My portfolio Gain is  /3 +$ +8.61%)  currently (clipped from my Schwab account). As some US states go back to work I will continue to reduce equity exposure unless the US recants its trade wars.  Absent America rejoining the world, I agree with Minard at Guggenheim, the S&P 500 could drop another 25%. 

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We Need More Than Data To Fight COVID-19

We need the right people to gather it and interpret it and it ain’t reporters or politicians or doctors and nurses.  It’s statisticians like

Dr John Ioannides Professor of Health Research & Policy at Stanford University

His research interests are clinical trials. He has worked in the fields of evidenced-based medicine and clinical investigation.  In particular, randomized trials and in appraisal and control of diverse biases in biomedical research.

He says: “The one situation where an entire, closed population was tested was the Diamond Princess cruise ship and its quarantine passengers. The case fatality rate there was 1.0%, but this was a largely elderly population, in which the death rate from Covid-19 is much higher.

Projecting the Diamond Princess mortality rate onto the age structure of the U.S. population, the death rate among people infected with Covid-19 would be 0.125%. But since this estimate is based on extremely thin data — there were just seven deaths among the 700 infected passengers and crew — the real death rate could stretch from five times lower (0.025%) to five times higher (0.625%). Even this highest estimate is phenomenally lower than the 3.4% initial estimate from the WHO.

Fareed Zakaria quoted him on last Sunday’s program and then had three experts on a panel that totally ignored the numbers.  WHY? Because these numbers are boring and will not sell media time.  Furthermore, it is not entertaining.  It is not sensational.  So what is the right investment strategy if Professor Ioannides is correct?

Here is some data from the field:

From Bloomberg Prognosis today

China’s Data on Symptom-Free Cases Shows Most Never Get Sick

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Problems, Problems

Which is worse: Covid-19 or the massive debt problem?  neither, it is knowing I have to take my wife into Stanford hospital for surgery next week and knowing there are currently 10 cases of coronavirus there and more expected next week.  The fact that my portfolio is still up 1%since the top and I am now back to 60/40 equity to fixed is no comfort whatsoever.  Think I’ll take a short nap and dream of poppies on Windy hill.

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