Coping with China.
I shoud have written far earlier to describe our wealth mnagement tactics to cope with China. Here’s my summary:
1. We sold down and then out on all stocks that had any China dependence. Most were doing well ( AVGO, CSCO etc), all are great companies. We were preserving gains, moving into cash, and living to fight another day.
2. So long as the US strong line is maintained we would be selling any remaining stock that could be tainted by the China fall out. In the meanwhile we have established a 5G/AI watch list comprising AVGO, CDNS, CSCO, TESS and VMW, so as to be ready when a bottom is formed and the China fall out is resolved.
3. In the meanwhile we are directing some of the free cash to boosting high yielding US centric stocks – NRZ, GLP, DRI – and to building a holding in KL, an exceptional gold miner.
4. The returns this year are very strong (c48%) so no need to be too active. Strong US based highyield companies and cash will do very well. The US centric market looks strong – low inflation, high employment, strong corporate profitability coupled with large capital inflows from weak economies in Europe – it is hard to see anything but a strong underlying uptick in our home market.
5. Decide your strategy, hold firm and good luck.
Have a good day, James.