Use access key #2 to skip to page content.

China after the Olympics

Recs

6

June 08, 2008 – Comments (4)

An Olympics brings a lot of economic activity preparing for it and I truly wonder how China will do after the Olympics.   It is getting close now, so another 3 months of business support from the Olympics and then that is gone.

We had Expo in Vancouver in 86 and it was enormously benefical for businesses directly involved, but the cost of it was an enormous burden on the masses.  There was a lot of public money diverted from important things like education and health care to pay for the one time only infrastructure.  I suppose some of the infrastructure was long term, but there was a massive build up and tear down around it.  It was major cuts to other things for at least 5 years to pay for Expo, and the money never went back to those other things.

So, China has two economic hits, a slowing export economy due to the over indulgence of the rest of the world and the loss of the one time only business from the Olypmics.

The savings rate is such that China can ride the economic down turn, but I still think we'll see a fairly significant economic down turn. 

4 Comments – Post Your Own

#1) On June 08, 2008 at 5:15 PM, LordZ wrote:

Comparing Canada to China is like comparing some hick small city to New York City in terms of population. I doubt the comparison of how the olympics will affect China based upon your expo back in 86 and the boom China will feel and has felt from preparing for the olympics is meaningful; likewise 20 plus years have passed between 1986 and 2008. Additionally massive rebuilding is needed thanks due to that massive earthquake, so demand for commoditiies and basic building materials will continue.

Plus as the Chinese have grown so has their appetites, similiarly the appetites in India and other so called emerging market economies are now accustom to eating more than a single meal a day.

Report this comment
#2) On June 08, 2008 at 6:05 PM, dwot (46.32) wrote:

You do have a knack for making me shake my head LordZ...

If population was the issue the most populated counties in the world wouldn't be the poorest... 

Report this comment
#3) On June 08, 2008 at 6:35 PM, bubuzim (96.03) wrote:

Hi dwot,

If you look at my post earlier today you'll see that I think it will do OK.  The olympics-associated problem is happening now... old news.  After the olympics, factories will get back to work, people will get paid again.  The bigger problem is the rising price of commodities and ending of commodity subsidies, which is also happening now and old news.  Next up is a rise in interest rates to support the renminbi against commodities.

 

Report this comment
#4) On June 08, 2008 at 6:42 PM, LordZ wrote:

Okay well its interesting that China is more relevant to the worlds economy than lets say Canada is.  Further these poorest countries ??? China ?? India ?? are catching up, future billionaires are made from companies in such emerging places, how many billionaires are from Canada ???

Dwot have you seen the South Park episode where Canada goes on strike ? Funny.

All im saying is that I doubt the Olympics is the only thing China has going for itself, and even if thats the case, theres going to be a massive amount of money headed Chinas way from said Olympics.

Yes its true the savings rate in other parts of the world is much much better. The economy has been in a downturn slow down for many years, but is that so bad ???

Only the strong and lucky will prosper.

What's an investor to do?

A brief anatomy lesson


My favorite quote, among the thousands that deal with investing, is this one: "When in danger or in doubt, run in circles, scream and shout."

Wait, wait. Wrong one. Here we go: "The key to good investing is not the brain, it's having the stomach."

While that might not be a word-for-word quote of Peter Lynch, it certainly is a paraphrase of what he taught. And he's not the only one who's expressed that sentiment. Remember this one?

"Be fearful when others are greedy, and greedy when others are fearful." Warren Buffett has lots of great advice, but that one just begs to be framed.

There's always something to worry about
Peter Lynch meant that worries always abound. The successful investor knows to mostly ignore them.

Right now, the big bugaboo is the turmoil in housing and the credit markets. Two years ago, it was avian flu. At the beginning of the millennium, it was the dot-com crash.

Before that, we feared that Americans couldn't keep up with the Japanese. Remember when "they" bought Rockefeller Center?

The 1970s had inflation and an oil crisis. The 1950s had fears of nuclear war.

Do you see a pattern here?
Although the market always has something to worry about, the worry du jour has never meant the end of the investing world.

Instead, strong businesses survive and keep growing -- taking the market along for the ride.

Report this comment

Featured Broker Partners


Advertisement