It all seems so ethereal. I am waiting to listen to some ridiculous conference call about Baidu (BIDU) and thinking that somehow it will matter, petrified if I don't get the skinny on it.
Yet, if we step back and try to be, say, the impossible one, Warren Buffett -- do you think he's listening to the Baidu conference call? Do you think he is worried about anything China, other than how it can help him get better prices for the merchandise he wants?
Ah, but we are not Warren Buffett. We don't have his money, or his time frame or his ABILITY TO BE WRONG FOR LONG STRETCHES OF THE HORIZON AND IT DOESN'T MATTER (housing, oil, IBM)
And, while I am typically castigated as someone who thinks too short term, what am I supposed to do, not do the work so I cannot explain in any coherent and rigorous fashion what's occurring?
The simple fact is right now that China might, in some ways, be unraveling and there are so many industries devoted to producing goods for China -- iron, copper, autos, turbines, airplanes, shampoo, soda, aluminum, zinc, you name it -- that to not try to figure out what's going on is to be willing to sacrifice your year.
Now if your year means nothing to you and you are in it "for the long run," then you don't have to do anything other than re-invest when stocks break down. You are in a remarkable and enviable position. If I were you, I would just sit there and wait for one or two pitches a year and nothing else. It's not worth it to try to figure out how to make even more money if you don't care about how much you make to begin with.
I, on the other hand, am expected to give my opinions on stocks and the market with an eye toward explaining what is occurring, and it is rather hard to ignore the dissolution of the marginal buyer of pretty much everything and still be sanguine. A lot of stocks, a lot of companies, heck, a lot of countries-- of which, fortunately we are not one of -- depend on China for business and it just isn't taking what it once took.
We have whole countries in Latin America that have no place to put their surplus goods. We have a country with byzantine laws on the books, like ours, that can't export oil even as there are refineries overseas that would love our oil. So instead it sells at a huge price differential to whatever the world price is.
So, I hang on every word out of China. I hope the Party encourages an "orderly" decline like last night's, not some pell-mell tsunami of selling. I listen to everything possible out of China , including anything that Baidu has to say, and I am jealous of Warren Buffett, like everyone else, because he can sit there with his Coca Cola (KO), IBM (IBM), American Express (AXP), Wal-Mart (WMT) and Procter & Gamble (PG) and perform amazingly, although if the rest of us owned the stocks we would, of course, be bums!