Money matters

Yikes… I’m usually not averse to a bit of market volatility. After a certain number of years’ investing you learn to shrug off the apparent evaporation overnight of hefty-sounding amounts of your paper wealth. “Some have the speed and the right combinations, but if you can’t take the punches, it don’t mean a thing” (Warren Zevon).  The days following 9/11, the depths of the SARS panic and the plunge in markets and indicators like Asian export volumes in 2008/09 were all excellent buying opportunities for those of us who could keep their heads and stomachs together. The Chinese word for crisis does not, as a million bores believe, combine the characters for danger and opportunity – but it would be great if it did because we may now be heading for the really Big One, which will put the others in the shade.

At least that’s the impression you get if you read sites like Zerohedge. If you thought Europe would get over its problems once Chancellor Angela Merkel accepted that every German family has to adopt a non-live-in Greek for the next few years, try their apocalyptic vision of contagion and markets pulling the plug on the whole of the north Mediterranean littoral, plus Ireland and Belgium. Add to that similarly nightmarish pictures of Mainland Chinese cities running up trillions of Yuan in debts after splurging on white elephant infrastructure projects, and you hardly have enough time left to think about the US, where the economy is in such fine shape that the most pressing issue is the right of the people to keep and bear light bulbs that waste 95% of the energy they consume.

Zerohedge is basically the Blair Witch Project for people who are into economics and money; if you don’t want to be frightened for a kick, or tempted into burying bars of gold in the woods, don’t look at it. There are plenty of calmer and more restful sources of opinion; Hong Kong’s very own Quamnet is unflappable and usually cautiously optimistic about life in general, thanks to an almost Zen-like lack of concern about the mayhem going on out there in the big wide world, over which our own little corner of paradise will surely float, unharmed, with its P/E ratios remaining not too demanding and its dividend yields rather attractive.

Which brings us to the subject of bargain-hunting. Fashion chain Esprit (330)? Professionally run – something I am a bit old-fashioned about – and recently subject to what looks like panic selling to the point it could be considered undervalued. Their clothes designs strike me as tiresome, but what do I know about that? The upside is Mainland expansion and the Chinese consumer story. The downside is their core traditional customer base: Northern Europeans, shortly to be diverting their spare spending cash to keep less fortunate neighbours in moussaka and ouzo. Unless…

Click to hear Warren Zevon’s ‘Boom Boom Mancini’!

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3 Responses to Money matters

  1. Al says:

    Hmmm….well, I don’t know about fancy-schmancy Cantonese, but in Japan
    危機 is crisis, with 危 = danger and 機 can mean opportunity depending on context.

    But yes, trying to divine meaning from combinations is a bad idea.
    Did you know that the roots of “carpet” are “car” and “pet”? Like, a carpet is a conveyance mechanism for pets. Ancient western wisdom.

  2. Real Tax Payer says:

    Hmmm…. not many comments today . Maybe everyone was floored by the Blair Witch thing.

    So here’s my 10 cent worth.

    Back in 1988 , which was a Dragon year, one of my Chinese staff reminded me that the Dragon can flick its tail at the end of its year with very unpredictable results : both good, but more often bad , ergo the 1989 “event(s)” ( Actually the economic problems in China which sparked off the events of 1989 – viz huge inflation – were already evident by end of 1988 , but supressed )

    Likewise at the end of the next Dragon year in 2000 . The dot com boom was bubbling, despite the tail end of the Asian Financial Crisis… everything was set for a monster crash and the dotcom boom peaked in March 2000 (according to Wikipedia) . Then came the crash, and 9/11 was the last straw ( + SARS for HK )

    2012 is the next Dragon year ( and a Water Dragon at that = Crocodiles ? ) . So I am predicting a very turbulent 2013 !

    May the ( Chinese) gods protect whoever is chosen to lead HK at that time . And let’s ‘pray’ to those gods it’s not the horse : he would witlessly lead us nose-first into the Dragon’s jaws.

    (PS : the world is expected to end on 21 dec 2012 according the Mayan calendar, so perhaps none of us will be around to see 2013)

  3. Probably says:

    The whole euro-diasater thing can be linked directly back to excessive public sector spending (primarily upon themselves and their own pension funds). In the UK for example, the majority of public sector employees get both an inflationary and a merit pay rise which makes a mockery of any governments claim to increase public spending by at least the rate of inflation – the only thing that ends up suffering is the front line services. Despite this protectioninsm these civil (self-serving) servents are the only people in the UK to still have index linked pensions!
    One would like to think that Eurpoean politicians will now realise this is a fundementally flawed model for an economy (despite the otherwise advice of their own Sir Humphreys) . There is obviously a salutary lesson there to be learnt for both HK and China and I seriously worry that the current sorry retinue of HK politicians really don’t get it.

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