Share Picks 2024

Well for all the obvious reasons the presidential election (and to a lesser point senate) will be the big question mark for US markets. We've already seen the failure of getting a budget approved last year and this will only intensify going into this years election. I think major EU weapon manufacturers will be a safe bet, US once is dependent on Trump not winning; same with anything related to green technology / EVs etc. and I'd not touch anything related to China / China based manufacturing as a company with someone's else 10 foot pole. That's a market that is going down burning right now and is likely to go down the NK route of raising walls.

I strongly disagree on the unemployment side of things; without being to specific but there's plenty of more jobs than people willing to take them at the moment. To quote an HR recruiter I know for a major US Manufacturing company "There are 1.5 millions jobs with 1 million applicants"; but I think companies will have to start paying significantly more for the more basic labour which is what they are resisting; only need to look at the automotive deals struck with 20% increases to see that. The simple fact is American minimum wage has not moved for a very long while and it's got to the point it's not longer sustainable and the companies will have to raise them to actually get people. There's no longer a queue to apply but rather the other way around and I think this will cause problems for companies with the wrong management thinking it's an employers market out there (saw one CEO talking about how their employees should blur work and free time and work 60 to 80h weeks etc., yea, good luck with that).

Personally my plan this year is anything not AI related (bubble) but continue to buy luxury stocks (keep building that sub portfolio), investment companies (diversification) and non cyclical companies. Probably add a few more raw material companies as well because I feel a bit light in that area but nothing fancy but more iron ore, copper etc. that will always have a market. Beyond that keep building out positions in the companies I do own already; nothing wrong with adding on to existing stock and of course various index funds.

I think you are to generous to China, between their population peak, failure of their own banks (the banks refuses to pay out money in bank accounts, limiting debit cards without notice etc.), the shadow borrowing companies crashing (this is where the wealthy could get returns making the economy work), ballooning elderly population (and no funds to pay pensions) etc. China is in a way worse place by comparison.

And the stock in the same 12 month period went down from $119.53 to $68.63; so yay the 43% loss became only a 37% loss in value for the same period. But that's not the point; the point is not only are Chinese companies inherently risky (see all the times CCP demanded golden shares, demanded "donations", had senior people disappear etc). The simple fact is they are operating in an environment where the state can literally decide to take over the company, go to war with Taiwan, not allow transfers of foreign currency outside of China etc. which would wipe out the share value without possibility to even sell at 90% loss (see what happened in Russia if you want a recent example). China is not an open economy with actual laws and a legal system to back it up but a dictatorship with no actual independent courts pretending to be open market economy with all the corresponding risks. Basically it's like investing in North Korea and hoping that they don't decide to go to war with South Korea and act rational; it's possible but it's a very very high risk investment for questionable returns.

But other companies have hit those type of P/E ratios previously up above 170 (Coca Cola for example) as well; there's often some fad companies that drive it high in various periods.