My Investing Muse (30Sep24) - layoffs, US bans Chinese vehicles, Berkshire sells banking stock
My Investing Muse (30Sep24)
Layoffs & Closure news
Layoff & closure news continued into the week.
US plans to ban Chinese Vehicles in USA
BIDEN PROPOSES BAN ON CHINESE VEHICLES IN U.S. The Biden administration has proposed banning key Chinese software and hardware in connected vehicles on U.S. roads, citing national security concerns. This move would effectively bar nearly all Chinese-made cars from the U.S. market and require automakers to remove Chinese components from their vehicles. The plan, targeting potential risks from foreign surveillance and remote control, is set to take effect in 2027 for software and 2029 for hardware. Source: Reuters
If America banned Chinese vehicles in USA for protectionism, this is an admission of the weakening of the domestic automotive industry. Businesses should be able to compete in the world stage in terms of quality, price and value. This may have a short term impact in terms of Chinese exports into America. What would be of greater concern is whether the American automotive companies are able to innovate and remain competitive in the long run.
With Tesla as the exception, there is limited confidence in traditional brands such as General Motors and Ford to be competitive in this space. As Chinese vehicles continue to be received into various continents, the American automotive industries may find themselves losing market shares in international markets. Does this spell the slow death of American automotives?
Berkshire sells Bank of America Shares
The sales of Bank of America continued. Berkshire continues to sell.
JPMorgan Chase, Wells Fargo & Bank of America Lose $5 billion to Offload Rotten Debt As Credit Card Delinquencies Surge. US banks reported $21.3 billion in net charge-offs in Q2 2024, due largely to credit card delinquencies & sour commercial real estate loans. - The Daily HODL
Typically, Berkshire holds stock forever. While there are a million reasons to sell shares, could Berkshire be losing confidence in the company or sector? Is Bank of America looking its fundamentals? Is the banking sector going through a difficult season? As board members, Berkshire would have access to more information than most of us. This is something that we should continue to monitor.
My final thoughts
The tension in the Middle East between Israel & Lebanon, Russia & Ukraine would continue to post concern for the global economies. Should we follow the money trail, the defense sector would continue to benefit from the sales of arms and ammunitions. Personally, I wish for all conflicts to be resolved as soon as possible and the importance of everybody to discuss over the negotiating table instead of using bullets and guns.
They are opportunities for black Swans to show up and this is something we should take note of. I recommend some hedging as part of our portfolio. China has invested billions of dollars into the economy that led to one of the best week of investing for the Chinese market. They have to be permanent value an infrastructure establish so that the value can be sustained. Should China collapse, the global factory would bring down the rest of the economies who need China for their affordable products.
Let us consider spending within our means, avoid leverage and invest with what we can afford to lose. The market remains hot and in some companies are overpriced. The artificial intelligence boom would demand results and returns over time. Should the earnings of AI related companies disappoint, the artificial intelligence sector take a bigger hit in the comings earnings season. Let us research before investing.
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