Let's get to June. Hung Lee, founder and CEO at Jail Warren Capital. So in terms of timing here, David Kelly, a JP Morgan Asset Management says it's now timed by stocks and bonds. The sell off has been enough. But if you look at the market cap of the Wilshire five thousands, that's basically the US stock market, it's about thirty seven trillion, and that's hundred and fifty percent of g d P. And Warren Buffett has famously said he feels more comfortable about eight percent. So what is it?
Is it time to buy now or still be cautious? We remain very cautious. And the UM on Chinese equities, I think um if anyone wants to invest in China right now, multinationals with exposure to China perhaps is the best bet. But even so we think a near term COVID risk is still very high. And then you see Guandjo new case in Guanjo in New Cases a story, and you know all the restrictions are back on again. And you know, last last months October um into twentieth
Party Congress Beijing was kind of impartial lava. And in September there was Chando. So it seems like each month there will be new hotspot for COVID lavta UM. So we don't see any material, meaningful, significant relaxation of a zero COVID strategy. So I think even though with that, even the central bank continues to loosen monetary policy, pumps a liquidity into the market and economy, the velocity of
the money is holding back the economic recovery. So UM, we we see we don't have good visibility as to what the normalized economy will be after COVID UM and frankly after the new new cabinet started to work uh in Q one next year. So um, in the absence of a clear visibility of mescycle earnings, UM, of the economy, of the public companies we're trying to we're just holding back from looking at China directly, all right, So basically listen to them when they're saying, look, we are unswervingly
sticking with COVID zero. What about the property sector though, do you think that we've potentially seen a bottom there? You saw that huge jump in developer stokes yesterday. Regulators expanding financial support there for that sector. But I remember correctly, um, the opening in the opening remarks UM other the twentieth Party Congress UM they mentioned the ones again homes are for living in all for invest So it seems like, you know, the central government and s o E s
are bailing out project by project. But after this restructuring or de leverage, um, the s o E property developers will play a bigger role in the real estate sectors and the non performing or overly lever lever the developers will be washed out. And you're certainly showing that you are still cautious on the China market story. When we've been looking at these capital outflows. What brings that back in? Morgan Stanley was saying equities would lead a rebound inflows,
but what about bond buying? Does that resume at a bit of a slower pace? Um. So, like we said earlier we discussed the earlier offshore investors remain very cautious on China, especially the Chinese equities UM and monitor in terms of monetary policy psychost China, the US art divergent. Um.
The FED is tightening and the PBOC is losening. So um, you know, um, we were to see we believe there's more downside to reman the US dollar um more downside than upside, So in that regard, um, that's another head wing for the Chinese equities in Chinese economy in general. So yeah, yeah, your argument was pretty cogent that equities are not investable in China. Decided to COVID overhang and then also some of the other issues with with policy
and with the property sector. What I'm curious about, though, is that you say that the way to play it is through multinationals. The issue is I suppose that Boeing and Nike and Disney are all companies that have faced a lot of headwinds because of some of these same policies in China. Would it be better to play Southeast Asian companies or European companies that are doing business in China or is even that a tricky area. I think
the current environment is really great for stop kicking. So on the broad the broad brush, um, you can argue liquidity will be leaving China to our Southeast Asian verzios um. You know all those emergent markets, um. But the liquidity is not great. So that's why we prefer to play China still with multinationals. On on a lo side, as
well as on the shore side. For example, we very much like the idea of the short idea of Tesla because effectively, it's a it's a Chinese stock with it's more than fifty of the production capacity in China and thirty percent of the global shipment coming out of China. So and because it's a heavy exposure to China and to running b and to the slow economy and to geopolitics between US and China, we think it is a
very interesting stock. So we're trying to look at the company by company, and then you know, Nike, on the other hand, we believe their substantial upside because you know, once the bc I saga is over and the impact is gone, uh, the normalize the demand that it continues to be very high. UM. So this is a perfect environment for stock picks as opposed to macro kind of you know, big picture bets. All right, let's talk about
the currency. We know that a lot of the is being due to a dollar strength, but also a lot of movement from authorities to try and stabilize the one as well, barring, as you say, any major lockdown events. Where do we see the un trade? UM? I think um, just like I said earlier. UM looks like the central bank the government in China continues to losen because in the velocity of the money isn't there, So they're trying to pump in um as much liquidity into the market,
into the economy. UH, some in via the infrastructure projects and some via you know, the bail else to on the unfinished the projects, and some into s O ees. So the monetary cycle over there is UH is loosening this versus titaning in the US. So we believe UM let maybe visa the US dollar will continue to weaken, but probably not by a big margin, so probably sideway around like seven point two five to seven point five. Okay, really quickly, you mentioned Tesla had a good looking profile there.
What about some of the local makers like Neo and Expung and h and the Otto. I think this is such an interesting time to look at evs. On the one hand, you can argue the regulatory support has given such a nice boost to all the EV capacity and the productions. On the other hand, the competition is really catching up, and that if you are a pure EV player, you're only making five thousand to ten thousand cars a month and selling that much it is not a real business.
It's not generally at J. L. Warren Capital