TIP611: The Bear Case for China w/ Kyle Bass
We Study Billionaires - The Investor’s Podcast Network
The Downward Spiral of Foreign Direct Investment in China
This chapter examines the dramatic drop in China's foreign direct investment following the COVID pandemic, revealing a fall from over 300 billion to about 33 billion in 2023. It also explores the challenges faced by multinational companies regarding trapped profits and the implications of China's geopolitical and legal landscape for foreign investors.
On today’s episode, Clay chats with Kyle Bass, the founder and principal of Hayman Capital Management. Hayman’s first major success came from effectively shorting the housing market in 2008, and Kyle was profiled in Michael Lewis’ book The Big Short.
After seeing Chinese stocks drop 20% over the past year, I invited Kyle back onto the show because he has been sounding the alarm bells for years on a market correction in Chinese markets.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
02:01 - Why China is potentially preparing to invade Taiwan.
06:59 - How China has been restricting data and information flow to foreigners.
09:16 - Major military, mainland, and legal actions the CCP has taken in the past few years.
19:55 - Why foreign direct investment to China has collapsed in recent years.
25:53 - Potential sanctions the US may implement if China invades Taiwan.
33:38 - What Kyle is seeing in the Chinese real estate market.
39:33 - Whether he sees the crisis in Chinese affecting other markets globally.
47:10 - Why he believes the Fed is out of touch with reality.
54:48 - How Kyle is positioned as an investor today.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
- Hayman Capital Management’s website.
- Conservation Equity Management’s website.
- Related Episode: TIP396: China and the Macro Impact w/ Kyle Bass | YouTube Video.
- Follow Kyle on Twitter.
- Follow Clay on Twitter.
- Learn more about the Berkshire Summit by clicking here or emailing Clay at clay@theinvestorspodcast.com.
- Check out all the books mentioned and discussed in our podcast episodes here.
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