Hello to copiers and followers,
China’s GDP growth for this year is tracking around 4.5%, and consumer spending is still expanding by at least 2.5%. When you look at specific valuations, such as PDD trading at a mere 7x its 2027 earnings despite earnings growth averaging 10% to 15% annually, the disconnect is glaring. Furthermore, there remains significant scope for large-scale fiscal and monetary stimulus in Beijing.
With reasonable earnings growth and world-class companies, there is simply no fundamental reason Chinese stocks should remain this cheap. If there were genuine structural reasons to exit the space entirely, I would. But history consistently shows that markets alternate between euphoria and pessimism, and the biggest money is made by buying when unfounded pessimism is dominant.
That said, I am making tactical adjustments to my portfolio. For stock-specific reasons, I will be selling my position in XNET (the US-listed Chinese stock).
However, I won’t be expanding my broader holdings in Chinese shares. The opportunity cost is simply too high right now, as gold mining stocks offer a far more compelling buy.
I am rotating capital univested cash into precious metals and miners. Western governments continue to print and spend money at a pace that is totally inconsistent with their historical budgets and fiscal realities. History shows us that when debt levels reach such extremes, those debts are rarely repaid in full; they are inflated away. This environment of fiscal dominance and currency debasement is highly favorable to precious metals. After superb gains, this sector has recently sold off hard. I view this recent pullback as a classic, healthy correction within a secular bull market—one that I expect to continue for at least the next five years.
Beyond gold, I am also adding exposure to copper and possibly silver. The macro setup for these metals is undeniable, given that forecasted demand now far exceeds projected production. We are looking at structural supply deficits that will only tighten further, making them a highly attractive addition to the portfolio.
Unfortunately I cannot promise when the current pullback in these markets will end, but buying good assets during hard pullbacks is a time tested strategy that will likely offer high returns.
Regards,
Jim... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
Struggling big time, Jim. We need a few more performances like July's to get out of the red. 🤞... Show More
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Mon Aug 17 2026 05:18:04 GMT+0000 (Coordinated Universal Time)
