Until now, China’s stock markets were widely considered to be unconsolidated subsidiaries of the Chinese Communist Party. Then came The Glums of August as panic spread across the world. In our Conference Calls, we have consistently advised calm. The S&P 500 was ripe for a sell-off, but it did not achieve that status because of China. The problem has—and continues to be—its inflated multiple, the fruit of endlessly growing buybacks, dividend boosts, and balance sheet etiolation to gratify shareholders—quite a bit—and insiders—a whole lot.
We are making adjustments to our Recommended Asset Mixes, but they are neither huge nor rooted in terror.
There are some unsettling global developments and risks levels are continuing to rise.
So, here is our take…