Interesting Links

Here are some interesting links that cover some of the investment themes we have talked about in the last year.

China US relations

Cool, sensible talk on US and Chinese relations, given by an expert at the Carnegie Institute. Likely rise in value of RMB ahead of April is discussed, and there are some useful comments on the Google dispute and the need for the US to upgrade its internet infrastructure.

Intel vs ARM

Useful New York Times article on the battle by chip companies to dominant the smart phone market.

Pellegrini Fund

Paolo Pellegrini was the right hand for John Paulson, he now runs his own fund, PSQR. This link will take you through to his latest letter to the investors. Lots of meat and some interesting comments on what could happen to US corporate tax rates.

Oled

This one is for Geeks. A technical comparison of the Oled screen used in the Nexus Android handset and the LCD screen in the Apple iPhone. The older, cheaper, LED screen wins the contest hands down.

Charlie Munger speaks

When I was in Washington, just before Christmas a well known billionaire, speaking at a conference I attended, said that the biggest investment theme out there was working out how to profit from the coming collapse in US government finances. The billionaire said we had three years before the shoe dropped. Here is Charlie Munger saying a similar thing and on a similar time scale. He thinks the ship goes down in 2012.

Smart Medicine

Here is another brilliant Ted lecture, this time on how smart-phones and other wireless devices are leading to a revolution in medical monitoring and diagnostic technology. Today, when stuck in a meeting, we check our emails; now you can check your heart rate and glucose levels instead. You see, with technology there are endless things to worry about.

Japan, past the pint of no return.

This link will take you through to a presentation about Japan from the really rather good, Contrarian Investing website.  Not surprisingly, Japanese economic growth stalled around the time that the aging workforce started to shrink. Japan could be our future, it certainly looks as though it could soon be South Korea, which of all the Asian countries most resembles it in terms of culture and demographic profile. Lots of good data here.

US corporate taxes to rise?

The enclosed link will take you to the latest fund letter from Paolo Pellegrini's new fund. Pellegrini was John Paulson's right hand man when he did his greatest ever trade. http://www.marketfolly.com/ . There is lots of good meet in this letter. In particular, it makes a logical case for US corporate taxes rising. US corporate is the only sector of the economy that is increasing its cash holding, yet capex and employment continue to be light. Therefore hitting this sector with higher taxes could play to the larger electorate and helps plug a fiscal whole. As Hewlett Packard's results made clear, corporates are not spending a lot on new computers, growth is still coming from consumers and emerging markets. A rise in taxes has not been factored into US equity valuations yet.

I thought the following paragraph, which argues for a one off Yuan revaluation, was also interesting:



We all know a revaluation of the RMB is likely and there is at least one New York listed ETF I know of that gives exposure to this trade. The interesting thing is then what happens? Commodities will rise, that's a given because of the impact on the dollar. However, a  revaluation surely signifies a more concerted move to tilt the Chinese economy away from exports and fixed asset investment to consumer. As this sinks in will commodities continue to be strong?

Another -though unlikely thing to look out for - is that if the revaluation was much more than 5% it could hit other Asian exporters. China adds little value, it is essentially an assembly point for parts and subsystems supplied by the rest of Asia. A sharp revaluation of the RMB therefore runs the risk of hitting Asian exporters .