0:05

Within MSCI All

0:05

Country World Index, the US has

0:09

almost two thirds of the

0:09

benchmark, China's 4%. And so I

0:14

don't think people are thinking

0:14

about the last decade is

0:17

probably not going to look like

0:17

the next next day. And that's

0:21

where, you know, we think you

0:21

got to kind of balance things

0:24

out a little bit. There's an

0:24

opportunity in some of these

0:26

unloved areas such as China.

0:32

Hello, and welcome to the fat pitch Podcast, the podcast where every

0:34

week we bring you interviews

0:38

with thought leaders, legends,

0:38

luminaries, and even a few

0:41

lunatics from the world of

0:41

alternative investing. I'm your

0:45

host Paul Barausky chief

0:45

distribution Officer of Sealy

0:49

investment securities and every

0:49

week I'm joined by my co host,

0:52

Clint Sorenson, founder of

0:52

wealth shield. What do we mean

0:57

by fat pitch podcast? Well, I

0:57

bet everyone's heard of Ted

1:00

Williams, one of the greatest

1:00

baseball players of all time,

1:03

Ted famously described his

1:03

approach to hitting as waiting

1:06

for the fat pitch. What he meant

1:06

was that he would only swing it

1:09

pitches that were in the strike

1:09

zone, and were exactly where he

1:11

wanted them. In other words, he

1:11

was willing to be patient and

1:15

wait for the perfect opportunity

1:15

to take action. Williams knew

1:19

that swing at every pitch, even

1:19

those outside the strike zone

1:21

would result in a lower batting

1:21

average and missed

1:24

opportunities. But by waiting

1:24

for the fat pitch, Ted was able

1:29

to maximize his chances of

1:29

success. And he certainly

1:32

achieved extraordinary Hall of

1:32

Fame results. That philosophy

1:38

can be applied to many areas of

1:38

life, including investing where

1:41

Warren Buffett, the legendary

1:41

investor and businessman also

1:44

use the term fat pitch to

1:44

describe his approach to

1:47

investing. Just like hitting he

1:47

believed that the key to

1:51

successful investing was in is

1:51

to wait for the right

1:54

opportunity to come along and

1:54

wait for the perfect Fitch. In

1:59

Buffett's view, a fat pitch was

1:59

a rare and undervalued

2:01

investment opportunity that had

2:01

the potential to generate

2:04

significant returns, he would

2:04

wait patiently and still does

2:08

for these opportunities to

2:08

present themselves and then take

2:12

decisive action when the time

2:12

was right here at the fat pitch.

2:15

As I mentioned, every week,

2:15

we're gonna have a chance to

2:19

chat Clintonite with fantastic

2:19

minds from across the spectrum

2:23

of investing. We don't know if

2:23

it's the fat pitch, perhaps

2:27

they're gonna suggest to us that

2:27

it is time for the fat pitch.

2:30

But I think you're gonna have a

2:30

lot of fun as we do each and

2:34

every week listening and talking

2:34

to some of these terrific

2:38

opportunities, and we'll find

2:38

out is it a fat pitch or a ball

2:42

outside the strike zone? Well, hello, everyone and

2:48

welcome to this week's edition

2:51

of the fat pitch podcast. I'm

2:51

your co host Paul Borowsky chief

2:56

distribution Officer of Sealy

2:56

investment securities. And I'm

3:00

joined by my co host,

3:02

Clint Sorensen,

3:02

how are you? Thanks, Paul. And

3:05

great to have everyone. Yeah,

3:05

yes, it's awesome to have

3:07

everybody here. And we're joined

3:07

by Brendan Ahern from crane

3:10

shares. So Brendan is going to

3:10

talk to us about that pitch

3:13

investing in why China just may

3:13

be a fat pitch. So we pop up

3:18

your bio there, Brendon. And

3:18

then we'll get into some good

3:22

stuff here.

3:22

Yeah. Thank you, Paul. Thank you, Clint, for the opportunity.

3:25

Absolutely. It's

3:25

a pleasure to have you here

3:27

today with us. I know every

3:27

conference, every place I've

3:30

been lately, China's nothing

3:30

less than a hot topic, maybe at

3:33

the top of the list. And it's

3:33

nice to have an expert with us

3:36

here for our audience. Yeah, it's

3:38

pretty phenomenal. So Brendan, start off give us a little brief

3:40

background about you, you know

3:42

who you are. Yeah. How did you

3:42

get involved in investing in

3:44

general? And then, you know,

3:44

let's start talking about your

3:47

investment approach. And in

3:47

particular investment approach

3:50

to China.

3:51

Yeah, I've always

3:51

loved investing. You know, my

3:53

father is an incredible reader.

3:53

He from an early age was always

3:56

had I was reading The Wall

3:56

Street Journal, I just kind of

3:58

picked it up. And when I was 14,

3:58

I read Peter Lynch's went up on

4:02

Wall Street and went and bought

4:02

my first stock that promptly

4:05

went bankrupt. But yeah, I was a

4:05

little kid I bought TCB why

4:08

right it's by what you know, as

4:08

I love ice cream who doesn't and

4:13

I didn't, you know, is a tough

4:13

foray. But yeah, ultimately,

4:18

ended up post-college working

4:18

for Barclays Global Investors

4:22

moved from New York to San

4:22

Francisco, they were going to do

4:24

this thing called exchange

4:24

traded funds, and they were

4:27

going to call an iShares and had

4:27

the total dumb luck have been

4:31

ended up being like the 20th

4:31

employee dedicated to iShares as

4:35

soon as rolled out and spent 12

4:35

great years with iShares part of

4:39

Blackrock after they bought BGI

4:39

and iShares in 2009, but

4:43

ultimately, you got introduced

4:43

to Jonathan crane, he talked

4:46

about you know, his experience

4:46

living and building a business

4:49

in China and he kind of said,

4:49

hey, I want to build this ETF

4:52

firm gear to China, I was like I

4:52

can I can do that for us. So,

4:56

you know, kind of my father was

4:56

an entrepreneur, small business

4:59

owner, and I was Say, Hey, I

4:59

know he's worked for these big

5:01

companies, I want to go do

5:01

something like that. And so I

5:04

had the privilege of helping

5:04

make John's vision investable.

5:08

10 years ago, and like any small

5:08

business, there's pretty tough

5:12

going and the early days, but lo

5:12

and behold, through a lot of

5:16

hard work, good luck. Ukraine

5:16

shares has really become, you

5:20

know, 10 plus 10 $11 billion in

5:20

assets under management say

5:23

knock on wood.

5:24

Yeah, I mean,

5:24

what a phenomenal story. I mean,

5:27

what an incredible growth

5:27

trajectory and you guys have

5:29

just accomplished so much and

5:29

and I think it's amazing. Now

5:32

you're on CNBC a lot, too. So

5:32

you're a frequent commentator on

5:36

CNBC are among other media. So

5:36

you really are this go to China

5:41

expert. So I want to dig deep

5:41

into what this whole podcast is

5:44

about Paul and I had this idea,

5:44

we've been doing a monthly

5:47

series together, we had this

5:47

idea, hey, let's interview

5:50

people who have really

5:50

specialized knowledge on certain

5:53

areas within the investment

5:53

landscape, but also other

5:56

things, right, that could end up

5:56

being called fat pitch

6:00

investing. So what a fat pitch

6:00

is, is it comes from the Warren

6:03

Buffett theme, where he said,

6:03

Look, our approach to investing

6:07

is really like the Ted Williams

6:07

fat pitch styles, except we

6:10

don't strike out, we just wait

6:10

and watch as many pitches as

6:13

possible. And we swim,

6:14

we can take balls

6:14

all day long. That's the

6:17

beautiful thing and cleanse

6:17

right, we really said to

6:20

ourselves, hey, let's talk to

6:20

luminaries, legends and thought

6:24

leaders in everything from cold

6:24

storage to cannabis to China and

6:29

everything in between, and

6:29

really drill down on what's your

6:32

investment philosophy? And

6:32

frankly, what's your approach to

6:35

managing and making money and

6:35

really specialize in those

6:38

areas, and then let folks

6:38

determine for themselves if

6:41

that's a fat pitch. So we're

6:41

never here to talk about returns

6:45

necessarily, but to talk about

6:45

philosophies. And so I'd be

6:48

curious, not having known you

6:48

for that long. Really, what is

6:51

your basic, you know, overlay

6:51

philosophy, if you will,

6:54

underlying philosophy? I guess better?

6:56

Yeah. I mean, for

6:56

over 20 years now, I've been a

7:00

student of index methodologies,

7:00

which sounds like a cry for

7:03

help. But you know, the index

7:03

provider like MSCI, you know,

7:08

their global investable market

7:08

index methodology is arguably

7:13

the most important book in

7:13

finance because it dictates 15

7:17

trillion of both active and

7:17

passive assets, and, you know,

7:20

who's read it, and no one?

7:20

Right. And, you know, I would

7:24

just argue that these index

7:24

methodologies have intricacies

7:28

and, you know, a big one, I

7:28

think that's out there, as you

7:31

know, a lot of investors say,

7:31

you know, non US stocks, em,

7:35

China's out of favor. And if you

7:35

just looked at the numbers of

7:38

the s&p 500 versus MSCI Emerging

7:38

Markets or MSCI, China, since

7:43

the global financial crisis,

7:43

you'd say yeah, you know, s&p is

7:46

up like 500 eams up not even 100

7:46

You know, China's up 50 But this

7:52

is where you got to kind of look

7:52

at what is the composition of

7:55

these benchmarks? Well, you

7:55

know, MSCI Emerging Markets and

7:59

MSCI, China over 50% financials

7:59

and energy. So we go into the

8:04

greatest decade of growth

8:04

investing. And the definition

8:09

for em in China was basically

8:09

value stocks tech within MSCI

8:15

Emerging Markets 11%, MSCI China

8:15

Tech was 2%. And now the problem

8:22

is MSCI China tech went up like

8:22

2,000%, actually, you know, ran

8:28

circles around that, but he had

8:28

no exposure. And so the element

8:32

of you know, my leaving

8:32

Blackrock was saying, like,

8:36

listen, there's little things we

8:36

can do better. And particularly

8:39

around like China and emerging

8:39

markets where the growth part of

8:44

China the growth part of em has

8:44

not been properly represented,

8:48

in my opinion, and that's what

8:48

crane shares does for investors,

8:51

we give it that growth orientation.

8:53

That's awesome, too, because it's such a funny that devil is always in the

8:55

detail, but I remember looking

8:58

at in 2021 What financials and

8:58

health are with tech and

9:02

healthcare made up of the MSCI

9:02

All Country World Index, it was

9:05

like 44%. So to hear that MSCI

9:05

China only had 2% in tech,

9:11

right? You're

9:11

saying 44 versus too big of a

9:14

spread? 42%? Yeah, I'd say

9:14

that's more than nominal.

9:18

Yeah, it's amazing. Now that was healthcare and tech still, if you look at

9:19

that, that's significant

9:23

concentration relative to how

9:23

the MSCI index so you're not

9:26

comparing apples to apples to

9:26

your point. Yes. Appreciate

9:29

that. Let's talk about where do

9:29

you see the opportunities today?

9:32

You know, let's talk about that

9:32

within the context of China, and

9:36

why you think China may be a fat

9:36

pitch.

9:38

Yeah, I think,

9:38

you know, if you look at the

9:41

four big opportunities between

9:41

like, say, China, US equities,

9:47

European equities, Japanese

9:47

equities, right. You know, the

9:51

China is coming out of an

9:51

economic trough you know, this

9:54

reopening is going to be a real

9:54

thing, you know, World Bank

9:58

saying 5% GDP growth. growth for

9:58

2023. You know, us is basically

10:03

zero, Europe is zero, Japan is

10:03

one. But I think more

10:07

importantly, if we think about

10:07

fiscal and monetary policy in

10:11

these four regions, you know,

10:11

China, you know, they're easing,

10:16

you know, they're putting

10:16

liquidity into the financial,

10:20

right, so, so you have money

10:20

supply growing in China, you

10:25

have bond yields actually

10:25

falling. And then you have that

10:30

against the backdrop of in

10:30

China, you know, CPI is less

10:33

than 2%. The P e is below the

10:33

historical average. And we can

10:39

just contrast that with these

10:39

other markets, you know, USA,

10:44

Europe, Japan, where

10:44

quantitative tightening money

10:47

supply is shrinking, bond yields

10:47

are rising inflation, it's

10:52

coming down, but it's still

10:52

high. And then against the

10:55

backdrop of not, you know, above

10:55

average valuations, and we're

11:00

not rooting against these other

11:00

markets. It's just simply

11:04

saying, You're, I think Clinton

11:04

a lot, you know, within MSCI All

11:08

Country World Index, the US is

11:08

almost two thirds of the

11:11

benchmark, China's 4%. And so I

11:11

don't think people are thinking

11:16

about the last decade is

11:16

probably not going to look like

11:20

the next decade. And that's

11:20

where we think you got to kind

11:24

of balance things out a little

11:24

bit, there's an opportunity in

11:26

some of these unloved areas such

11:26

as China,

11:29

I have a couple

11:29

of questions being far less

11:32

learned than Clint. And

11:32

certainly the chasm between us

11:36

monumental question is, if you

11:36

read, let's just call it

11:39

mainstream media, they want to

11:39

convince us that COVID will be

11:42

now the number one export out of

11:42

China. And he concerns about the

11:47

impact there, I kind of look at

11:47

it as just the numbers thing. Of

11:50

course, the numbers look big,

11:50

because you're talking about

11:52

sheer population size. And the

11:52

other one is, I had not looked

11:56

at the growth of consumer debt

11:56

in China, and then somebody

11:58

brought it to my attention just

11:58

this week. Any thoughts around

12:01

those two subjects?

12:03

Yeah, I mean, you

12:03

know, China's this abandonment

12:06

of zero COVID, you know, an

12:06

element of that is that it is

12:09

OMA cron, which has less lethal,

12:09

you know, less lower lethality

12:13

rate than other, you know, other

12:13

variants. You know, and

12:17

obviously, I have no medical

12:17

background, so, you know, take

12:19

any sort of medical advice for

12:19

the tricks. So I think that's an

12:23

element of that, you know, it's

12:23

going to have an effect in

12:25

China. And then I think an

12:25

element of that is just simply,

12:28

you know, they gotta get their

12:28

economy going, right, that as

12:30

the global economy slows demand

12:30

from the world's factory is

12:33

going to slow, they gotta raise

12:33

domestic consumption, on

12:36

household debt, you know, it's

12:36

interesting, you know, you know,

12:39

the where deaths come from in

12:39

China, it's been a real area of

12:43

focus and households, it has

12:43

increased because, you know, the

12:49

older generation, you know, my

12:49

father was born in 1929. And,

12:53

you know, he has a Great

12:53

Depression, World War Two

12:56

mentality of, you know, you save

12:56

everything, and the younger

13:00

generation, you know, my mom is

13:00

a baby boomer, and a very

13:02

different mentality. And in

13:02

China, that's kind of the case.

13:05

So, you know, if you grew up

13:05

through the Great Leap Forward,

13:09

you're a saver, the newer

13:09

generation, you know, more

13:12

willing to, you know, have a

13:12

credit card. So, your net net,

13:15

you know, I think the key is

13:15

interesting, you know, deposits

13:19

in China 21 to 22, double about

13:19

as a trillion us more money in

13:26

bank deposits in China, because

13:26

of the concerns of zero COVID

13:31

You're being locked in your

13:31

apartment, and in some element

13:35

that's gonna go back into the

13:35

consumption space. You know,

13:38

that's our belief for 2023.

13:40

Yeah, great. Thank you. I love how fascinating the story which you

13:42

nailed the front end, right?

13:44

It's completely polar opposite.

13:44

Let's just compare the US. US

13:47

has a growth, slowing

13:47

environment, inflation slowing

13:50

environment with tight monetary

13:50

policy, right, market trends

13:53

have been mostly neutral kind of

13:53

shifting positive in recent

13:57

times, but really, they weren't

13:57

bearish prior to, you know,

13:59

really fourth quarter. So now

13:59

you've got this environment with

14:03

complete opposite. You've got,

14:03

like you said, an improving

14:06

economic situation. So maybe

14:06

talk about some of the data that

14:09

happened this week that I saw

14:09

from your morning report, right,

14:11

seeing improvement, the data,

14:11

you have low inflation, it's

14:14

really disinflationary

14:14

environment, maybe reopening

14:17

creates some acceleration, but

14:17

you have stimulus moving in the

14:20

right direction. So like all the

14:20

precursors to growth, like you

14:23

mentioned, are really in favor

14:23

of that Chinese story now. So

14:27

what have you seen in the data

14:27

front is kind of showing you

14:29

that maybe this is not a flash in the pan?

14:32

Yeah, I think, you know, the earlier the indications are that, you know,

14:33

domestic travel, and China's

14:37

come back almost back to pre

14:37

COVID levels, international

14:40

travel is going to be a little

14:40

bit slower. You know, Russia is

14:43

not allowing foreign airlines to

14:43

fly over, but you're gonna see,

14:47

you know, this huge human

14:47

migration during China's new

14:50

year, and they're gonna get out

14:50

there back after it from a

14:54

consumption perspective. And I

14:54

think, you know, we're going to

14:58

enter into earnings season In

14:58

four Chinese internet companies

15:02

that are kind of the

15:02

transmission engines for

15:04

domestic consumption as it

15:04

happens online. Yeah, the data,

15:08

Clint, you know, said that, you

15:08

know, retail sales in China

15:11

declined by a small amount in

15:11

2022, but actually increased for

15:15

online. So we love e commerce,

15:15

we love the domestic consumption

15:19

story. And I think ultimately,

15:19

there's a lot of skepticism,

15:23

there's a lot of scar tissue,

15:23

there's a lot of controversy

15:25

when you mentioned China. That's

15:25

a little bit of our thesis of

15:28

why the pain trade can be

15:28

higher, you know, that there's a

15:31

lot of money isn't been focused

15:31

on some of the things we've been

15:35

focused on.

15:38

What challenges

15:38

are out there that you see at

15:41

the forefront to really, you

15:41

know, challenge China's ongoing

15:45

growth and dominance?

15:47

Well, I think

15:47

real estate's been an area of

15:49

concern your that the

15:49

government, you know, has been

15:52

all over issue of distressed

15:52

property developers like

15:56

Evergrande, and Country Garden

15:56

and others and trying to

15:59

prevent, you know, that first

15:59

domino from going at the same

16:03

time property prices is actually

16:03

declined. And for people kind of

16:08

our collective age in China,

16:08

you've never seen a property

16:11

prices actually drop. Two thirds

16:11

of urban household wealth is in

16:16

real estate. And so that decline

16:16

actually hits the balance sheet

16:19

of households, which it wasn't

16:19

just zero COVID Real estate is

16:23

part of the reason you saw this

16:23

huge influx of money into bank

16:27

accounts. In some ways. There's

16:27

not a lot of mystery that China

16:30

from a government, the

16:30

government is about stability.

16:33

And whenever you think about

16:33

things, you just had to put it

16:36

as does that create instability,

16:36

or increases stability? And so

16:41

the government is all over this

16:41

real estate situation,

16:45

obviously, zero COVID The

16:45

potential unfortunately for the

16:50

unvaccinated amongst the elderly

16:50

is unfortunately, you know, a

16:53

potential problem. You know,

16:53

we've been I've been concerned

16:56

about Taiwan, which, you know,

16:56

it's kind of non consensus. But

17:01

I think a political mistake, you

17:01

know, is still, that there's a

17:05

element of, you know, that wants

17:05

to kind of stick it to China.

17:09

And if that's your concern, it's

17:09

not Chinese equities, you should

17:13

worry about I always say, you're

17:13

17% of Apple, that revenue comes

17:18

from China, you know, 12% of

17:18

Exxon Mobil, you know, 27% of

17:23

Intel revenues, you know, then

17:23

that's besides the Boeing's

17:26

Caterpillar, John Deere, you

17:26

know, a lot of us multinationals

17:30

have done really well in China,

17:30

and you're far more exposed to

17:35

US equities. That's what you

17:35

should worry about.

17:38

That's a good point. Definitely. And I think to continue to talk about this,

17:39

because I think the challenge

17:42

is, Paul, to your point of really important to kind of think about, but there's really

17:44

two camps out there. I'm talking

17:47

China longterm. Right, so

17:47

there's the bullish camp, the

17:49

Ray Dalio, if you read his book,

17:49

he talks a lot about China's

17:53

rise as the dominant empire,

17:53

right, they're kind of next in

17:57

line, they're the one

17:57

accelerating the US is kind of

17:59

decelerating. And then you have

17:59

Peter Z hands work, which is

18:03

extremely bearish, China due to

18:03

demographic situation. And I'm

18:06

gonna pull up an article real

18:06

quick that came out this week.

18:09

And I want to get your thoughts

18:09

on this. Because this does seem

18:11

like, you know, it's a real

18:11

threat, but they can mitigate a

18:15

threat. So let me pull up this

18:17

and be careful,

18:17

Brendan, whenever he starts to

18:19

pull things up, or draw on a

18:19

whiteboard, all the work we do

18:23

together, disaster could ensue.

18:26

Appreciate that, Paul, I got this, my

18:29

friend. So I'll

18:29

read this is from this week. And

18:31

you saw this news, right? So

18:31

China's population decline?

18:34

Yeah, first time in 61 years,

18:34

that's really the Hansel thesis

18:38

is that the population probably

18:38

peaked, you know, 10 years ago.

18:42

And by 2050, he's estimating

18:42

that the population would be

18:45

down to 600 million. And so when

18:45

you start to think about what

18:48

that does to industrialization,

18:48

what that does to, you know,

18:51

just growth rates in general,

18:51

you start to get this, and this

18:54

is a global phenomenon. This is

18:54

not just picking on China, we're

18:57

talking about China. So I'd love

18:57

your thoughts on that. Because

18:59

that's really a big, you know,

18:59

negative piece, or that I hear

19:03

that at least makes sense, a big

19:03

negative kind of opposing view.

19:07

So I love your thoughts on what

19:07

you think about population

19:10

growth. And

19:11

I think in the

19:11

West, you know, there's a lot of

19:13

reaction to crises, you know,

19:13

you have a mortgage situation

19:18

that builds up in Oh, wait, and

19:18

you know, totally implode. And

19:22

there's a reaction, right. And

19:22

the Chinese government, you

19:26

know, because of this emphasis

19:26

on stability is always thinking

19:28

like, what could happen? So,

19:28

like, you know, a few years ago

19:31

was shadow banking is going to

19:31

blow up China, and they

19:34

basically put that industry out

19:34

of business, or it's whatever

19:37

grands gonna be the first

19:37

domino, China's Lehman. And the

19:41

government came in and put them

19:41

on life support, you know,

19:44

you're just for doing this.

19:44

There's always something I would

19:47

say, Yeah, it's true that if you

19:47

take the current birth rate and

19:51

take that little XL and just

19:51

drag it right, you know, in 100

19:56

years, they're half their size.

19:56

The Chinese Government is very

20:01

aware of this issue. And you

20:01

know, I actually think, and I've

20:06

been trying to figure this out,

20:06

I'll let you know when I do. But

20:09

as Chinese government's going to

20:09

do something about it, there's

20:12

not been a good indication of

20:12

what those tea leaves, you know,

20:16

kind of look like, like, what is

20:16

the answer? But I think you're

20:20

just to your point, Clint, it,

20:20

this is not an issue, you know,

20:23

China's highly urbanized right

20:23

70% of the people in China live

20:27

in cities. And if you look at

20:27

South Korea, Japan, Italy, like

20:33

Manhattan, it's hard to have you

20:33

live in a two bedroom apartment

20:38

anywhere in any city, it's hard

20:38

to have like three kids or four

20:42

kids or five kids. I've thought

20:42

a lot about, you know, can you

20:46

name a city where people have

20:46

been a whole bunch of kids and

20:50

they live in like apartment buildings.

20:52

I couldn't say Salt Lake, but I'd take the apartment part out. But I also

20:54

think you could replace China in

20:59

that with about two thirds of

20:59

the developed countries that we

21:02

talked about, and undeveloped as

21:02

that. Let's just face it,

21:06

societies move towards less

21:06

offspring. I mean, Clint, we

21:10

could have a whole nother debate

21:10

about one of the things Russia

21:12

really wants is Ukraine's

21:12

younger population. And we've

21:15

had that discussion before, and

21:15

a whole host of other places. So

21:19

I would tend to concur with you

21:19

on that. That's kind of a

21:22

natural evolution of that

21:22

societal economic growth. Yeah,

21:25

yeah,

21:26

for sure. And I think, you know, for me, you know, from our investor base is

21:28

very global. And, you know, I've

21:32

thought about Jerusalem.

21:32

Jerusalem is a city where people

21:35

have a lot of kids and property

21:35

developers build buildings that

21:40

allow for families to have a lot

21:40

of kids. And I think, you know,

21:46

the Chinese government should

21:46

tell the ever grants a country

21:49

like, hey, like, we're gonna

21:49

create suburbs, you know,

21:52

because China doesn't have

21:52

suburbs. You know, everyone is,

21:56

you know, they call it vertical

21:56

peasants, right? Everyone lives

21:58

in apartment buildings. And, you

21:58

know, I've got three kids, I

22:01

live out in the suburbs outside

22:01

of the city. And, you know,

22:04

China doesn't have that. That's

22:04

the solution, you know, create

22:07

four bedroom apartments and say,

22:07

you have three kids, the

22:11

apartments free, I bet you

22:11

people start cranking out kids.

22:15

I think the view that your show

22:15

often people say, you know,

22:19

China's on a set of rails, and

22:19

they can't deviate. You know,

22:22

they deviate all the time. And

22:22

you know, President G, you know,

22:27

like any good politician adapts

22:27

to change. And this issue, they

22:32

will adapt, nothing explicit,

22:32

but it's common, it's common.

22:37

You know, it's funny, you say that, because it is linear thinking, just to

22:39

think that there's no other

22:41

variable, there's nothing I can

22:41

happen to kind of alter that

22:44

course. So appreciate your

22:44

thoughts there. Let's do a final

22:49

thought final kind of closing.

22:49

Watch as at that pitch, I think

22:52

you did an excellent job. It's yours

22:53

next week. Can I

22:53

ask a question, since you're

22:56

much more of a market technician

22:56

and I tend to think

22:59

demographics, bigger picture. I

22:59

also always joke with Clint,

23:03

when I went to you can see where

23:03

I went to school, obviously, for

23:06

those of us on camera at Penn

23:06

State, Clint knows I was in half

23:10

of the class that made the top

23:10

half possible. So I tend to like

23:15

to ask the more basic question

23:15

for the listeners that

23:18

appreciate that. I heard a lot

23:18

about and you alluded to it,

23:23

some really good Chinese tech

23:23

names that not just downs, 50%,

23:29

not 70, but 90%, you know, 85%,

23:29

real staggering numbers. So my

23:36

thought there is luck. We're not

23:36

here to make recommendations

23:39

ever individual companies. But

23:39

do you see a big beyond a dead

23:44

cat bounce? Do you see real

23:44

upward momentum for you know, a

23:47

great number of these companies

23:47

and the near or mid future?

23:52

You know, what

23:52

kind of hurt me personally,

23:55

financially was focusing on the

23:55

fundamentals of these companies,

23:58

which didn't decline. And you

23:58

know, you listen to these

24:01

quarterly calls over two years,

24:01

and it wasn't the end of the

24:05

world. And, you know, I was very

24:05

early and don't take my market

24:10

timing advice, because I did

24:10

terrible. But, you know,

24:13

ultimately, what I realized was,

24:13

you know, these stocks were

24:16

disconnected from fundamentals

24:16

that it was the trade war, it

24:20

was the tech war. It was, you

24:20

know, the potential delisting of

24:24

Chinese stocks. It was a global

24:24

pandemic coming from China. It

24:29

was China's internet regulation.

24:29

It was US political Barb's and

24:34

visiting Taiwan. So you had a

24:34

lot of institutional investors

24:40

went underweight the stocks, you

24:40

know, short sellers, if they

24:44

know there's no one protecting a

24:44

name, you know, you press that

24:47

short and it's like hitting an

24:47

air pocket in an airplane, you

24:52

know, if the Calvary is not

24:52

coming shorts can dictate the

24:55

narrative. And, you know, I

24:55

think that's why you had this

24:59

huge downdraft that really

24:59

exceeded anything fundamental.

25:03

And I think that's why, you

25:03

know, we can get a swing back.

25:07

He's really good

25:07

insight for someone like me, I

25:09

appreciate that.

25:10

And these

25:10

companies are so cheap relative

25:13

to like us tech, right? When you

25:13

look at it like a valuation

25:15

differential, it's amazing what

25:15

you can pick up over there. And

25:19

they're huge. The companies are

25:19

massive, like when you compare

25:23

him like customer counts to

25:23

like, users, and once you have

25:26

here in the States, I mean,

25:26

obviously, it's a population

25:29

differential, but it's massive.

25:30

Yeah, I mean,

25:30

it's almost a third of retail

25:33

sales, less restaurants and

25:33

autos. happens online. That's

25:38

the opportunity set, you know,

25:38

you got to urban middle class

25:41

that's still growing and you

25:41

know, they're consuming online.

25:45

And that's the opportunity for

25:45

our biggest belief, right. And

25:49

yeah, it's, you know, knock on

25:49

wood, right.

25:54

Well, Brendon,

25:54

we can't thank you enough. I'm

25:56

just really appreciative.

25:56

Brendon that you jumped on. You

25:58

are our guest today. We'll definitely have you on in the future as well. And look forward

26:00

to you know, talking China more,

26:04

but you heard it here, Brendan.

26:06

None of thanks so much, Paul. Thank you, Clint. It's a real pleasure.