https://amgreatness.com/2024/10/12/the-china-crisis/
It is largely axiomatic in the investment world that “to be early is to be wrong.” It doesn’t matter what you know, in other words, or how right you may be in understanding conditions or a developing situation. If the rest of the world isn’t ready to accept your case, if it isn’t “there” yet, then you won’t make any money. Indeed, you may lose quite a bit as you wait for everyone else to catch up to you.
Under this specific investment-driven definition, then, I have been wrong about China for the last 25 years or so—repeatedly and spectacularly wrong.
My boss and I once got ourselves into scalding hot water with our employer at a large financial services firm for questioning the sanity and propriety of the hottest investment deal on Wall Street, the initial public offering of PetroChina, the listed arm of the Chinese National Petroleum Company. I once left a job—at a different large financial service firm—in part because the firm’s investment bankers were censoring what we could and could not say about the Chinese government. For some reason, they found it difficult to cut deals with the Butchers of Beijing when their own firm’s analysts were back stateside, calling their partners “the Butchers of Beijing.” Funny how that works.
In a real, fundamental, political, and moral sense, I was right about China. I was right that the CCP cannot be trusted, that it is a brutal, neo-fascist regime. I was right that the defenders of the “global order” had it backward, that allowing China to play in the free world’s sandbox would not make its government freer and more amenable to classical economics and politics. All it would do would befoul the sandbox, make it grotesque and largely unusable. I was right that the CCP would lie, cheat, and steal to advance its agenda and achieve its goals. In short, I was right about everything—everything that is, except the short-term investment possibilities.
