No, this is not going to be a post about an investing theory. A definition from Wikipedia…Random Walk: a mathematical object, known as a stochastic or random process, that describes a path that consists of a succession of random steps on some mathematical space such as the integers.
People have the right to try to buy goods and services as inexpensively as possible, but like all behavioral paradigms the obsession with “cheap” for so many Americans is not optimal as it makes the country vulnerable. To the extent possible it would be advantageous, in my opinion, to de-couple from China economically. We are very far from the extent possible.
The value of US exports to China–which adds to US GDP–is only about a third of the value of Chinese imports to the US–which subtracts from US GDP. In 2019, the US had a trade deficit with China of almost $309 billion. That accounts for half of the total US trade deficit, which itself was about 3% of US GDP.
By the way, even using PPP (Purchasing Power Parity) as a measure–which skews the analysis in favor of less developed countries–China’s per capita GDP doesn’t rank among the top 100 countries in the world. Botswana’s per capita GDP is higher than China’s.
CNBC’s Jim Cramer has called China “a paper tiger.” I have written here many times that the Chinese government is engaged in a desperate battle against time, trying to bring China to something approaching first-world wealth before its demographics implode. I won’t be alive to see it, but I think their mission will fail.
Maybe my calling for de-coupling doesn’t seem consistent with my belief that China’s economic power is overrated and that the country will face a real crisis, largely due to its demographics. It is still not in the best interests of the US to have such a large trade deficit with one country, both economically and in terms of national security.
For not the first time, a medical professional has asked me if I am a doctor or have attended medical school or have a medical background. Last Friday, I met my new gastroenterologist, Dr. T, for the first time. At one point while he was taking my history, he asked me if I had a medical background. He then said, “You correctly use terms not used by lay people.”
I just smiled and said, “I have a lot of friends who are doctors.” I am under no illusion that I am remotely qualified to practice medicine. It is apparent, however, that my medical knowledge must be orders of magnitude greater than the vast majority of lay people.
No, my arm didn’t break from patting myself on the back.
David Banner (not his real name, but
formerly a real doctor–I should have written formerly a practicing physician) has suggested a feature called “Family of Three” where I would pick three cars for a garage. Implicit in his own picks (maybe I’m adding two and two and getting five) seems to be the notion that they wouldn’t all be sports cars, but a mix of vehicles.
As every regular reader knows, I am not a fan of SUVs, pickup trucks, and 99.9% of four-door sedans. Besides, how many car companies are still offering a broad product mix? Lincoln, Lincoln!, is only selling SUVs. Of course, my focus on one make is my own. A three-vehicle selection could come from three different companies.
Anyway, just wanted to float that balloon and gather input from readers. My three-car garage?
I guess these three are the crème de la crème of the crème de la crème.
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