Tag: Random Thoughts

Some thoughts of Tariffs

I think tariffs is just another form of tax.

It’s shared by buyers and sellers and is a tax on consumption, especially lower-end consumption – as the outsourced/imported products should proportionally be more lower-end.

It’s actually a more onerous “tax” on low to mid income US people, assuming that high-end consumers care more about high-end products which are not produced in China etc.

And it does increase gov income. Instead of higher taxes on wealthier people, this form of “tax” is more shared across average consumers.

Separately, tariff will income US mfg jobs.

However, who will do these jobs? With the current wave of AI, you could imagine more average “white collar” workers will be replaced by AI and maybe they shall go to manufacturing.

I think we should say all jobs are created equal – however, if you look back, when those manufacturers jobs were transferred out of the US, US was in the dominating position in the world. No one could force the US to get rid of “good jobs” and keep “bad jobs” back then – I could only imagine that those outsourced jobs were considered “worse”.

So now more people in the US will pick up those “bad jobs”. That’s not a very comforting vision for many average people in the US – probably more dangerous, more exposed to health issues, more repetitive (well white collar jobs can be repetitive). However, this should do good for US overall.

Where are talents?

If talents are born randomly, each year he or she could be anyone that is born anywhere in the world.

Even if China has 1/6 of global population, its newborn is less than that. In 2024, 132mn babies were born. In 2023, China has 9mn newborns.

That makes ~7% of global new born, less than half of the 17% population weight.

 

When high-end consumer brands are too mass market…

I remember the old days when I feel a natural bond with strangers if we own the same consumer product.

A “good” brand that I like can be associated with a group of people that I am likely to feel comfortable to mingle with.

This happened to Apple products during my college time, and later translated to Apple Watch and AirPod.

This happened to Allbirds shoes during my California time, where I could chat with strangers who are wearing Allbirds in local Starbuck shops.

Over times, when that brand is too mass market, that mojo gets lost – not all people you met using iPhone meet your expectations, thus you no longer use it as an indicator of this person’s characteristics.

When using iPhone simply can’t tell you that much about this person, it becomes more of a utility. You probably need other consumer goods to show who you are.

Random thought on China’s role in US debt

Historically, China was a big buyer and still a big holder of US gov debt, which to some extent led to the ultra-low interest rate environment.

Nowadays, China is still helping keep the US interest rate low, indirectly. I think by not providing good return opportunities, China is forcing money to go to other places, indirectly providing more money (with low return alternative) in the global market for the US gov.

It’s not just impacting foreign capital interested in China, but Chinese money as well.

Alternatively, if China has attractive opportunities all over the place, it will compete for global money one way or another.

Human beings are depreciating assets

One thing we can avoid is that we age.

Just like assets have depreciation life cycle – e.g. computers are 5 years, we human beings are depreciating as time goes by.

If a person can only do a thing at age of 50 similar to what he or she can do at age of 30,  the “depreciation” would be of significance.

However, one thing is different – we can improve on ourselves.

Buffett’s knowledge and investment skills is probably improving over the years. Thus the “carrying value” is probably increasing for a very long period of time for Buffett, even though depreciation also grows.

Other occupations like lawyers and doctors seem to be benefiting from “aging”.

Sometimes, there are external shocks that we can’t prepare on our own, especially if we continue on a repetitive daily life.

We need to actively access our carrying value from time to time, and be an honest “auditor” for ourselves. Then, we need to come up with plans as a “manager” for ourselves.

Is China placing bets on both sides of the US president race?

Just a random thought..

 

It was a bit obvious that it Musk, a big support for Trump, has a fairly big exposure to China via Tesla. Earlier this year, Elon Musk was meeting with the top leaders from China, and even his mother is doing commercial ads (brand ambassador) in China

On the other side, you are seeing more recently that China and India is reached some sort of peace agreement on the border. It’s really surprising to me, considering how sensitive China is on border issues. If you notice that Kamala Harris partially shares an Indian heritage, then it’s sort of like a support for Kamala Harris as well.

Again just random thoughts.

[Edit: Oh Usha Vance (JD Vance’s wife) also shares Indian heritage. 

A “crowd” that works

What’s a good “crowd”?

How do people know they can trust themselves collectively?

Democracy in the US won’t work if the mass can’t think/vote reasonably or behave as “adults”.

If we just use words like “respect” each other – well it’s a good quality but not enough.

I think of some key elements:

a) a crowd needs to be able to deduce correctly – like 1+2=3. Given “1” and “2”, they know those two add up to 3.

b) a crowd needs to be able to double check the facts – like they can verify “1” is “1”, so that misinformation won’t cause much harm.

c) a crowd needs to be able to correct itself. If somehow 1+2 = 10 is the mainstream idea, the crowd can find out they were wrong and make it 1+2=3 in a timely manner.

d) in many more cases, it’s not a deterministic problem. There is no one correct answer, but probably a rang of answers like 1.5-2.5. In this case, people who say 2 don’t need to correct people who say it’s 1.5 or 2.5. Or there is no right or wrong, but just a preference between 1-10. In that case, people needs to recognize the fact that there is a distribution, and a “10” shouldn’t kick a “1” out of the crowd, or vice versa.

 

China is back with good policies. What’s next?

China’s stock market is back. Everyone know.

China rolled out policies to help its stock market & economy. This makes sense.

What are the missing parts?

Some might say geopolitical tension is still an unsolved issue.

I won’t disagree. But I feel it’s not as extreme as before.

Some may say a deeper structural reform.

Fair; but in short term this might not change.

What I think is missing (and China can start to think in short term) is how China can better participate & even organize global affairs & how the world economy can grow better with a stronger China.

Historically, China didn’t excel on this. During times when its economy was leading the world, it didn’t take much care of the world. It could give stuff to nearby countries; it could invent and other can learn; however, it didn’t actively “organize the world”.

A strong economy that can’t lead is a loss to the world, I think.

How to lead? How to make other countries live better as China is a bigger part of global GDP? Not by giving free money but in a healthy, organic way.

That’s the question I haven’t seen much discussion.