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This is the latest blog from a Sheffield giftware importer who visits the chinese interior a lot ( as well as the usual expo cities on the coast ). I thought it was interesting, hope you do too.
Greetings from Yiwu, China.
Last week I was telling you about some of the magic numbers associated with Chinese New Year. You can read it here.
A few days ago it was like a ghost town in Yiwu. I went to the office we have here, and the whole street, normally hectic with street food, market traders and crammed with cars was simply empty. The five story block where the warehouse and office is even had the electric and water switched off. I had to find a lonely security guard and persuade him to switch the power on.
But now the workers are coming back, flooding back into the city bringing it back to life and vibrancy. Almost in the space of a few days everything has changed.
This is back to work week for about half a billion Chinese workers. The factory gates are open and the month long holiday is over. I have been visiting some of our suppliers this week, checking out the new collections and the common complaint is that not enough workers are returning to work. Those that do are asking for more money. And many having been back to their home town, are in high spirits and full of bravado.
I'm beginning to understand the Chinese mind set about work. It's like this; the average worker comes from a far flung village. In that village all the youngsters have older relatives who have "Chu qi gong zhuo" - means going out to find work. But this is not just about work, it's about having a life experience a grand adventure. The stories they tell of the big cities far away, bravely doing battle with the big boss, and getting huge page rises. Probable all exaggerated by a few glasses of rice wine and wanting to make old Mum & Dad proud - but not always, some really do make it big. Arriving home in red ribboned new BMW is not uncommon these days. The youngsters hear the stories every Chinese New Year, they see the heros, they want to go out there too. And they do, not many youngster stay at home, it is the norm to leave home when you can to go on that big adventure.
So after a two or three weeks back in the hometown swapping stories, and finding out who gets paid what, where the best jobs are and which cities have the best pay... they make their plans and head off optimistic and ready for adventure. The boss back in the big city is in trouble these days. Negotiations are tough, there is always another factory offering slightly better rates. It's common for bosses to welcome old workers back with a nice fat red envelope of cash. One complained that after handing out envelopes to his regulars, some of them upped and left for another factory. Others stand outside the factory with recruiting tables and posters advertising wages and working conditions. Trying their best to look like the kind of boss you'd like to work for.
Another huge factor now, is that the home towns in far flung corners of China are developing like the coastal cities did fifteen / twenty years ago. Newly minted business people going home and starting a factory, nice shops and leisure facilities opening up back home. Some workers, decide to work in the factory near home. Even half the money, the saying goes is worth it if you can live with your family. There are some who forego the chu qi gong zhou adventure for a happy home life.
Wages are increasing fast in China, the reality is that price of exported goods will go up. It's a price worth paying I think. It only takes a little maths to figure out if labour cost rise even by a lot, the relative prices in Europe will still be hard to compete with. Or will it?
The world is turning, big things changing - you can sure see it up close and personal in China.
Greetings from Yiwu, China.
Last week I was telling you about some of the magic numbers associated with Chinese New Year. You can read it here.
A few days ago it was like a ghost town in Yiwu. I went to the office we have here, and the whole street, normally hectic with street food, market traders and crammed with cars was simply empty. The five story block where the warehouse and office is even had the electric and water switched off. I had to find a lonely security guard and persuade him to switch the power on.
But now the workers are coming back, flooding back into the city bringing it back to life and vibrancy. Almost in the space of a few days everything has changed.
This is back to work week for about half a billion Chinese workers. The factory gates are open and the month long holiday is over. I have been visiting some of our suppliers this week, checking out the new collections and the common complaint is that not enough workers are returning to work. Those that do are asking for more money. And many having been back to their home town, are in high spirits and full of bravado.
I'm beginning to understand the Chinese mind set about work. It's like this; the average worker comes from a far flung village. In that village all the youngsters have older relatives who have "Chu qi gong zhuo" - means going out to find work. But this is not just about work, it's about having a life experience a grand adventure. The stories they tell of the big cities far away, bravely doing battle with the big boss, and getting huge page rises. Probable all exaggerated by a few glasses of rice wine and wanting to make old Mum & Dad proud - but not always, some really do make it big. Arriving home in red ribboned new BMW is not uncommon these days. The youngsters hear the stories every Chinese New Year, they see the heros, they want to go out there too. And they do, not many youngster stay at home, it is the norm to leave home when you can to go on that big adventure.
So after a two or three weeks back in the hometown swapping stories, and finding out who gets paid what, where the best jobs are and which cities have the best pay... they make their plans and head off optimistic and ready for adventure. The boss back in the big city is in trouble these days. Negotiations are tough, there is always another factory offering slightly better rates. It's common for bosses to welcome old workers back with a nice fat red envelope of cash. One complained that after handing out envelopes to his regulars, some of them upped and left for another factory. Others stand outside the factory with recruiting tables and posters advertising wages and working conditions. Trying their best to look like the kind of boss you'd like to work for.
Another huge factor now, is that the home towns in far flung corners of China are developing like the coastal cities did fifteen / twenty years ago. Newly minted business people going home and starting a factory, nice shops and leisure facilities opening up back home. Some workers, decide to work in the factory near home. Even half the money, the saying goes is worth it if you can live with your family. There are some who forego the chu qi gong zhou adventure for a happy home life.
Wages are increasing fast in China, the reality is that price of exported goods will go up. It's a price worth paying I think. It only takes a little maths to figure out if labour cost rise even by a lot, the relative prices in Europe will still be hard to compete with. Or will it?
The world is turning, big things changing - you can sure see it up close and personal in China.
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At one level we should celebrate that workers are better able to talk with each other and go back and better negotiate the value of their skills and time.
But this being a betting web-site, importers using sub-contractors who are operating at very low margin in China should be worried for their prospects. Recommendations ( aka guesses! ) are
AAPL - 527.67 get out
HPQ - 29.75 get out
But this being a betting web-site, importers using sub-contractors who are operating at very low margin in China should be worried for their prospects. Recommendations ( aka guesses! ) are
AAPL - 527.67 get out
HPQ - 29.75 get out
So if I understand you correctly, bongo, essentially what you are saying is that the share price of stocks like AAPL, who build their products in China, is now exposed to the impact margin compression due to labour costs (wages) in China rising, therefore they are not to be held (if not shorted).
Chinese wages rising is not news, so my first question is, how is this not priced in?
My second question/s is, how significant of a driver in the share price of AAPL is potential margin compression? What are the other drivers and how are they all weighted?
And finally, shouldn't rising wages in China making it "not uncommon" for more and more Chinese to "arrive home in red, ribboned new BMW" a bad thing for a company like AAPL, selling a premium priced product in their market segment? How is opening up a market of a billion consumers who can now afford to buy more stuff because they are earning more money a bad thing for a consumer products company? Would that not more than offset any negative impact on the share price from margin compression (and hence lower net earnings), with higher earnings through growth?
bongo, you keep surprising me on here and the other forum, unfortunately the wrong way. It's never about cutting and pasting and repeating the first interesting (to you) story you find, it's about thinking about it first before you do.......then posting it.
P.S.
Bad form not acknowledging my rebuttal to your first global warming denier post (I couldn't be tossed with a rebuttal to your second post once both you and Mexico disappeared from the thread) after all the time I put into it explaining it all to you. I was almost offended. Almost.
Chinese wages rising is not news, so my first question is, how is this not priced in?
My second question/s is, how significant of a driver in the share price of AAPL is potential margin compression? What are the other drivers and how are they all weighted?
And finally, shouldn't rising wages in China making it "not uncommon" for more and more Chinese to "arrive home in red, ribboned new BMW" a bad thing for a company like AAPL, selling a premium priced product in their market segment? How is opening up a market of a billion consumers who can now afford to buy more stuff because they are earning more money a bad thing for a consumer products company? Would that not more than offset any negative impact on the share price from margin compression (and hence lower net earnings), with higher earnings through growth?
bongo, you keep surprising me on here and the other forum, unfortunately the wrong way. It's never about cutting and pasting and repeating the first interesting (to you) story you find, it's about thinking about it first before you do.......then posting it.
P.S.
Bad form not acknowledging my rebuttal to your first global warming denier post (I couldn't be tossed with a rebuttal to your second post once both you and Mexico disappeared from the thread) after all the time I put into it explaining it all to you. I was almost offended. Almost.
So that's a sell from Bongo and a don't know from Menelaus.
I'd certainly go with Bongo in the short term simply because the share prices of the two stocks in question are performing weaker than the index.
I'm afraid that's probably a bit to simple for some folks.
I'd certainly go with Bongo in the short term simply because the share prices of the two stocks in question are performing weaker than the index.
I'm afraid that's probably a bit to simple for some folks.
It looks like there's another mug who will follow me from forum to forum.
"So that's a sell from Bongo and a don't know from Menelaus."
NO, not quite. It's like "here's is something that has no relevance on the price short term and perhaps a positive impact long term so SELL" from bongo and "you haven't thought it through" from Menelaus.
"I'd certainly go with Bongo in the short term simply because the share prices of the two stocks in question are performing weaker than the index."
As long as you don't define "short term" you can claim anything you want without any meaning. AAPL was consistently OUTPERFORMING the index for three years, and mugs were listening to analysts telling them that it was on it's way to $1,111, when the fundamentals changed and the stock dropped from $700 to $400. Outperforming the index is one of many moving parts one needs to consider in trading/investing decisions, there are many more.
"I'm afraid that's probably a bit to simple for some folks."
Simple I suppose is one word someone could use. They could also use amateurish, childish, inept, unskillful, inexpert or even stupid. Lot's of other good choices too but let's not go there.
"So that's a sell from Bongo and a don't know from Menelaus."
NO, not quite. It's like "here's is something that has no relevance on the price short term and perhaps a positive impact long term so SELL" from bongo and "you haven't thought it through" from Menelaus.
"I'd certainly go with Bongo in the short term simply because the share prices of the two stocks in question are performing weaker than the index."
As long as you don't define "short term" you can claim anything you want without any meaning. AAPL was consistently OUTPERFORMING the index for three years, and mugs were listening to analysts telling them that it was on it's way to $1,111, when the fundamentals changed and the stock dropped from $700 to $400. Outperforming the index is one of many moving parts one needs to consider in trading/investing decisions, there are many more.
"I'm afraid that's probably a bit to simple for some folks."
Simple I suppose is one word someone could use. They could also use amateurish, childish, inept, unskillful, inexpert or even stupid. Lot's of other good choices too but let's not go there.
Menelaus that still adds up to a don't know.
Why write if you've got nothing to say?
Why write if you've got nothing to say?
It looks like there's another mug who will follow me from forum to forum
That's called paranoia by the way.
Get help.
That's called paranoia by the way.
Get help.
If that's how you read my post, then that's fine. Giving English lessons is not what I would like to so.
BTW, looked in the mirror lately, or are you still scared sh1tless to have a look?
BTW, looked in the mirror lately, or are you still scared sh1tless to have a look?
AAPL was consistently OUTPERFORMING the index for three years, and mugs were listening to analysts telling them that it was on it's way to $1,111,
These mugs you refer to. Mugs who were watching their investments rising all the time?
Menelaus it doesn't take much to rip anything you write wide apart does it?
You've got a lot to learn about trading shares.
These mugs you refer to. Mugs who were watching their investments rising all the time?
Menelaus it doesn't take much to rip anything you write wide apart does it?
You've got a lot to learn about trading shares.
Mugs who were buying at $700.
Stick to trading bubble gum wraps with other children in your heighbourhood, this stuff is way over your head. I suspect all those children also have more self-respect than you do, so you'll gain from that too.
CLOWN.
Stick to trading bubble gum wraps with other children in your heighbourhood, this stuff is way over your head. I suspect all those children also have more self-respect than you do, so you'll gain from that too.
CLOWN.
After all the waffle from Menelaus he still can't manage to give his opinion on whether the two shares in question are buys, sells or holds.
Which tells us all we need to know about him.
Which tells us all we need to know about him.
I wrote a 10,000 word essay that predicted PRECISELY where AAPL was headed and why over a year ago, it's still up here, you should look for it.
And I guarantee you I didn't just say "that stock is doing worse than the index therefore sell" because that's the stuff of simpletons.
If you want SPECIFIC trading or investing advice, then ask for it, politely, don't hide behind your brainless arguments and insults. It makes you look more of an idiot than you really are.......if that's possible.
And I guarantee you I didn't just say "that stock is doing worse than the index therefore sell" because that's the stuff of simpletons.
If you want SPECIFIC trading or investing advice, then ask for it, politely, don't hide behind your brainless arguments and insults. It makes you look more of an idiot than you really are.......if that's possible.
Menelaus
23 Apr 11 08:51
Joined:
03 Feb 05
| Topic/replies: 6,174 | Blogger: Menelaus's blog
15 Things About the US Economy You Could Easily Miss if You Bought into the Apple Hype Or 15 reasons why you should take a MASSIVELY short position on AAPL:
1. Unemployment (U6) rising
2. Average hours worked decreasing
3. Average annual income decreasing
4. Number of homes in foreclosure increasing
5. Average home price dropping
6. Student loans surpass Credit Card loans
7. Number of credit cards defaulting increasing
8, Number of student loans defaulting increasing
9. Divorce rate increasing
10. Gasoline prices increasing
11. Food prices increasing
12. Taxes increasing
13. Health costs rising
14. 43 million on SNAP
.
.
.
15. Steve Jobs is perceived as Apple
Yes, polybot, FED induced liquidity put a lot of hot air under your AAPL plays this past year but the real economy begs to differ......and the real economy at the end ALWAYS wins.
Will $332, or $350, or anything else now matter in October? How about February, 2012? I don't trade with a 14 hour planning horizon, it seems you do.
Price of AAPL when Menelaus wrote the above nearly 3 years ago:
$350
Price 6 months later:
$450
Price one year later:
$633
Price 18 months later:
$700
Current price almost 3 years later
$530
23 Apr 11 08:51
Joined:
03 Feb 05
| Topic/replies: 6,174 | Blogger: Menelaus's blog
15 Things About the US Economy You Could Easily Miss if You Bought into the Apple Hype Or 15 reasons why you should take a MASSIVELY short position on AAPL:
1. Unemployment (U6) rising
2. Average hours worked decreasing
3. Average annual income decreasing
4. Number of homes in foreclosure increasing
5. Average home price dropping
6. Student loans surpass Credit Card loans
7. Number of credit cards defaulting increasing
8, Number of student loans defaulting increasing
9. Divorce rate increasing
10. Gasoline prices increasing
11. Food prices increasing
12. Taxes increasing
13. Health costs rising
14. 43 million on SNAP
.
.
.
15. Steve Jobs is perceived as Apple
Yes, polybot, FED induced liquidity put a lot of hot air under your AAPL plays this past year but the real economy begs to differ......and the real economy at the end ALWAYS wins.
Will $332, or $350, or anything else now matter in October? How about February, 2012? I don't trade with a 14 hour planning horizon, it seems you do.
Price of AAPL when Menelaus wrote the above nearly 3 years ago:
$350
Price 6 months later:
$450
Price one year later:
$633
Price 18 months later:
$700
Current price almost 3 years later
$530
Thanks for that Gin.
I think my rule of thumb over the comparison with the index is more valuable advice to an investor than 100,000 words from Menelaus never mind 10,000.
What a complete charlatan he is.
I think my rule of thumb over the comparison with the index is more valuable advice to an investor than 100,000 words from Menelaus never mind 10,000.
What a complete charlatan he is.
Hmmm, I thought I shoved that lie up gin's arse before. I guess I didn'y shove it up deep enough. Well, here it goes again then, I'm sure he'll "feel it" this time.
Here's the post that announced the AAPL short:
Menelaus 19 Apr 11 20:51
It has nothing to do with volume. NASDAQ is a weighted index (unlike the DOW) with AAPL a dominant 20+pc weight. NASDAQ announced a rebalancing of the index reducing AAPL's weight to almost half of that. Combine this defensive action by NASDAQ with the Steve Jobs health situation, supply chain interruptions hitting earnings in Q4 and the overall US and global economy slipping into another recession and all the arrows are pointing SOUTH, not NORTH. When Americans are faced with a choice of filling their SUV's with petrol or buying an ipad, I think I know which they'll choose. Good luck those staying long AAPL. As I stated before I'm MASSIVELY short.
Here's an update post:
Menelaus 13 Jun 11 12:01
I went short AAPL at around $342 in April. I loaded up short positions right after their last earnings statement with the stock shooting to $350+ when I believed we hit top for the year. Perhaps you weren't reading my posts carefully enough. It closed at $325+ Friday. I would throw that calculator you are using away and buy a new one if a drop from $350 to $325 works out to a 3-4pc drop.
Here's closing the trade at a profit:
Menelaus 17 Jun 11 16:44
Closed positions.
AAPL $323 shorted on three different occasions at a weighted average at about $348 (7pc decline)
NFLX $247 shorted at about $273 (9.5pc decline)
[b]AND HERE'S CONFIRMATION by another poster (not exactly a friend of mine on here) validating not only the AAPL short but also NFLX:
[/b]
Whippet 17 Jun 11 18:04
I definitely remember melly saying he was shorting apple near the top, it was trading somewhere between $330-$355 when he said he had done it, it is up to all of you if you believe he got a price of $348, I don't really care. Also the NFLX was called correctly as well.
Do you feel it now gin? How about you Cripps?
Here's the post that announced the AAPL short:
Menelaus 19 Apr 11 20:51
It has nothing to do with volume. NASDAQ is a weighted index (unlike the DOW) with AAPL a dominant 20+pc weight. NASDAQ announced a rebalancing of the index reducing AAPL's weight to almost half of that. Combine this defensive action by NASDAQ with the Steve Jobs health situation, supply chain interruptions hitting earnings in Q4 and the overall US and global economy slipping into another recession and all the arrows are pointing SOUTH, not NORTH. When Americans are faced with a choice of filling their SUV's with petrol or buying an ipad, I think I know which they'll choose. Good luck those staying long AAPL. As I stated before I'm MASSIVELY short.
Here's an update post:
Menelaus 13 Jun 11 12:01
I went short AAPL at around $342 in April. I loaded up short positions right after their last earnings statement with the stock shooting to $350+ when I believed we hit top for the year. Perhaps you weren't reading my posts carefully enough. It closed at $325+ Friday. I would throw that calculator you are using away and buy a new one if a drop from $350 to $325 works out to a 3-4pc drop.
Here's closing the trade at a profit:
Menelaus 17 Jun 11 16:44
Closed positions.
AAPL $323 shorted on three different occasions at a weighted average at about $348 (7pc decline)
NFLX $247 shorted at about $273 (9.5pc decline)
[b]AND HERE'S CONFIRMATION by another poster (not exactly a friend of mine on here) validating not only the AAPL short but also NFLX:
[/b]
Whippet 17 Jun 11 18:04
I definitely remember melly saying he was shorting apple near the top, it was trading somewhere between $330-$355 when he said he had done it, it is up to all of you if you believe he got a price of $348, I don't really care. Also the NFLX was called correctly as well.
Do you feel it now gin? How about you Cripps?
I don't read your tripe any more Menelaus.
You're a compulsive liar, a charlatan, and a time waster.
I also believe that you've got mental problems.
Get help.
You're a compulsive liar, a charlatan, and a time waster.
I also believe that you've got mental problems.
Get help.
The only thing I feel is your apoplectic rage bursting through the screen every time somebody points out your failings.You really should try not to take it all so seriously – I was just “kicking the cage” to make sure your still with us (a bit like my elderly relative who I think I’ve mentioned before that you remind me of)
"I don't read your tripe any more Menelaus.
You're a compulsive liar, a charlatan, and a time waster.
I also believe that you've got mental problems.
Get help."
And I think you are amongst the biggest idiots posting on these forums, and certainly the number one in lacking self-respect.
Is that make us even?
You're a compulsive liar, a charlatan, and a time waster.
I also believe that you've got mental problems.
Get help."
And I think you are amongst the biggest idiots posting on these forums, and certainly the number one in lacking self-respect.
Is that make us even?
One thing I am puzzled about though is this:
Of the “15 reasons why you should take a MASSIVELY short position on AAPL”, how many had significantly changed just 7 weeks later to make it a buy again
Of the “15 reasons why you should take a MASSIVELY short position on AAPL”, how many had significantly changed just 7 weeks later to make it a buy again
Menelaus
05 Mar 14 13:34
Mugs who were buying at $700.
Stick to trading bubble gum wraps with other children in your heighbourhood, this stuff is way over your head. I suspect all those children also have more self-respect than you do, so you'll gain from that too.
CLOWN.
There is no need to 'sign' your posts.
We already know you'e a CLOWN.
05 Mar 14 13:34
Mugs who were buying at $700.
Stick to trading bubble gum wraps with other children in your heighbourhood, this stuff is way over your head. I suspect all those children also have more self-respect than you do, so you'll gain from that too.
CLOWN.
There is no need to 'sign' your posts.
We already know you'e a CLOWN.
He needs help that Menelaus.
I think everybody's got him weighed up now.
I think everybody's got him weighed up now.
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