Tech Review | The Road Ahead In China For U.S. Tech Companies (video)

Tech Review (TR 2018-01-06)--Domain Mondo's weekly review of tech news with commentary, analysis and opinion: Features • 1) The Road Ahead In China For U.S. Tech Companies, 2) Technology was the best sector of 2017, 3) Investing: The Week, Investing Notes, 4) ICYMI Tech News.

1) The Road Ahead In China For U.S. Tech--Kai-Fu Lee's Advice to Mark Zuckerberg

Sinovation Ventures (domain: sinovationventures.com) CEO Kai-Fu Lee, a former Google and Microsoft executive who led those companies' efforts in China, discusses the road ahead for U.S. tech companies in China on "Bloomberg Studio 1.0" with Emily Chang (Bloomberg.com video above published Dec 20, 2017). [Editor's note: Lee states the obvious painful truth, Silicon Valley--Facebook, Paypal, Google, Amazon, et al--in many cases, offers inferior technology to what is now available from Chinese tech companies, Tencent, Alibaba, et al. China is also now leading, or soon will be, in AI.]

Note also: Axios China | Axios.com: 3. The mystery of Miles Kwok, aka Guo Wengui, and Steve Bannon--"Kwok and Bannon's convergent views of the PRC, and their love of the spotlight, this could be an interesting partnership ... until it collapses in recrimination, as every partnership eventually seems to do for both men." [Editor's note: Kwok & Bannon: 'Two Dead Men Walking.'] 4. PRC to curtail bitcoin mining operations--"Beijing does not like Bitcoin."

2) Technology was the best sector of 2017: 

HSW Advisors (domain: hightoweradvisors.com) managing partner Jordan Waxman on what sectors of the market did well in 2017 and how the GOP tax plan will influence the stock market in 2018. Fox Business video above published Dec 29, 2017.

Technology holdings--how three common market indices compare:

• The S&P 500 is 23% Technology. Top 5 tech names represent 13.4% of the entire index: Apple (3.8%), Microsoft (2.9%), Google (2.8%), Amazon (2.1%), and Facebook (1.8%).
• MSCI Emerging Markets are 28% Technology. The Top 5 Tech names are 18.0% of the whole index: Tencent (5.4%), Samsung (4.3%), Alibaba (3.6%), Taiwan Semi (3.5%), and Baidu (1.2%).
• The Dow Jones Industrial Average is 17% Technology. Top holdings: Apple (4.7%), IBM (4.3%), Visa (3.2%), Microsoft (2.4%), Intel (1.3%) and Cisco (1.1%).

3) Investing

The Week: All 3 U.S. major stock indexes end at fresh records again; Dow +0.9%--businesstimes.com.sg. See also: S&P 500 index.

Investing Notes:

• Byron Wien's predictions for 2018: #4: "... S&P 500 ends the year above 3000 since earnings continue to expand and economic growth heads toward 4%." #12: "The Mueller investigation of the 2016 presidential election fails to implicate any members of the Trump family in collusion with Russian operatives."

• Global Wealth Report 2017: Where Are We Ten Years after the Crisis? | Credit-Suisse.com: "Comparing wealth gains across countries, the United States is an unquestionable leader. The country continued its remarkable unbroken spell of gains after the financial crisis and added USD 8.5 trillion to the stock of global wealth. In other words, the US generated more than half of the total global wealth aggregation of USD 16.7 trillion of the past 12 months."

• Jeremy Grantham, chief investment strategist for GMO in Boston, well known for bearish views, says the stock market’s next move could take stocks dramatically higher--“As a historian of the great equity bubbles, I also recognize that we are currently showing signs of entering the blow-off or melt-up phase of this very long bull market”--Grantham's letter | gmo.com (pdf) to investors this week.

• Miami a haven for rich investors: "downtown development authority is working to bring down investment managers from the Northeast to Miami"--bizjournals.com.

• Blockchain: I’m in Awe of How Far the Scams & Stupidities around “Blockchain Stocks” are Going | WolfStreet.com: "This can happen only during the very late stage of a bubble."

• Bitcoin: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’ | Bloomberg.com: "You know bonds have an interest coupon, stocks have earnings and dividends, gold has nothing. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.”

• Momentous Change in US Natural Gas, with Global Impact | WolfStreet.com: "Even China is buying U.S. LNG. In 2017, the US became a net exporter of natural gas for the first time."

• Brexit: Switzerland too Falls Out of Love with the EU | WolfStreet.com: "the EU risks alienating a nation that jealously guards its independence, neutrality and national sovereignty more than arguably any other in Europe."

• The Core Problem Facing Every Investor Today | ZeroHedge.com: "we need to be painfully honest with ourselves about our sources of regret and target our investments accordingly. If we can be this honest with ourselves, it’s a VERY powerful strategy."

4) ICYMI Tech News:

• Meltdown and Spectre | meltdownattack.com. "Perhaps the Meltdown and Spectre bugs are the impetus for making long-overdue changes to the core DNA of the semiconductor industry and how chip architectures are designed."--Why Intel x86 must die: Our cloud-centric future depends on open source chips | ZDNet.com.

• Amazon Is A Multi-Trillion-Dollar Monopoly Hidden In Plain Sight | Amazon.com, Inc. (NASDAQ:AMZN) | SeekingAlpha.com

• German Court enjoins Amazon from using Google Adwords to place advertisements on Google search pages for "Brikenstock", "Birkenstok" or "Bierkenstock" which link to Amazon offers, some of which apparently offer fake Birkenstock shoes.  "For us, Amazon is an accomplice," said Birkenstock CEO Oliver Reichert recently in SPIEGEL, adding, "I say it this way: Before the castle is under attack, the surrounding villages are looted. We have observed for some time, as lax Amazon deals with scammers who earn a fortune with counterfeiting."

• EU Asks: Does Control of ‘Big Data’ Kill Competition? | WSJ.com

• Tencent & Alibaba: Two Different Strategies--Tencent focuses on WeChat, games and deals for its global strategy while Alibaba is looking to build a global payment system. WeChat reportedly has more users, but Alipay’s aggregate transaction volume is higher, according to JP Morgan’s John Hall, though WeChat Pay can also process large transactions if it’s used on e-commerce platforms

• 18 Exponential Changes We Can Expect in the Year Ahead |  TechnologyReview.com: "9. Sordid revelations in crypto-speculation will be outweighed by the wall of money entering the assets class."

• Google (Alphabet Inc. $GOOG $GOOGL) moved $19.2B to Bermuda shell company in 2016, to save $3.7B+ in taxes; money moved between Irish firms and Dutch firm with no staff--Google’s ‘Dutch Sandwich’ Shielded 16 Billion Euros From Tax | Bloomberg.com: "Google uses two structures, known as a "Double Irish" and a "Dutch Sandwich ..."

• China is building a giant $2.1 billion AI research park | CNBC.com

• U.S. Committee on Foreign Investment in the United States (CFIUS) blocks sale of Moneygram (domain: moneygram) to China's Ant Financial (domain: antfin.com).

• Germany vs China re: Cybersecurity: "Germany's ambassador to China calls out China on their lack of progress on bilateral cybersecurity efforts"--CSOOnline.com.

• Brick & Mortar Meltdown Reaches Movie Theaters | WolfStreet.com

• How Alibaba, Tencent, SoftBank are becoming the biggest allies of India's digital entrepreneurs | indiatimes.com

• CES 2018 Live Streams & Video | DigitalTrends.com Jan 8-12 ces.tech

• Inside the Eccentric, Unstoppable Deal-Making of Masayoshi Son | Bloomberg.com: "The Japanese billionaire ... Does he know what he’s doing?"

From the Reuters.com feed:

• Security flaws put virtually all phones, computers at risk | reuters.com

• Factbox: What you need to do about newly discovered computer chip flaws | reuters.com

• AT&T to launch 5G in U.S. by late 2018 | reuters.com

• Apple's battery replacement offer to reduce 2018 iPhone sales: Barclays | reuters.com

• Global crypto-currency crackdown sparks search for safe havens | reuters.com.

• LeEco founder defies China return order, stays in U.S. for car fundraising | reuters.com

• Google eyes Chinese e-sports market with investment in Chushou | reuters.com

-- John Poole, Editor, Domain Mondo  

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MacroView: First Nine Days of President Trump with Many More To Come

Domain Mondo's weekly review of  macro economic and investing news:
 
MacroView Feature •  Trump has now been President for nine days (noon Jan 20 - noon Jan 29) as I write this--and for those who really think that Friday Executive Order is the only thing that matters, I'll get this out of the way up front, read: Donald Trump’s Refugee Executive Order: No Muslim Ban -- Separating Fact from Hysteria | NationalReview.com.

I agree with Jim VandeHei and Mike Allen writing in Axios.com:

"We can't stress this enough: Watch closely the specific, substantive moves of the Trump White House. Try to block out the white noise of outlandish statements and unforced errors, and the hyperventilating they provoke. Otherwise, you miss the big — and in some cases, radical — changes coming our way. In fact, White House officials tell us they welcome what seem like needless distractions, because it allows them to jam through transformative, disruptive ideas and orders without focused public scrutiny of any particular item ... Read the weekend papers, and flick through cable, and the unambiguous conclusion is that Trump's debut was pretty much a debacle. But was it? If you examine what he did based on what he wants to do and ignore much of what he says for show, this was actually a remarkably productive start. By the White House's count, 13 presidential actions in first week tied to specific campaign promises ..." (emphasis added, read more at link above)

Here's a quick look at some of what Trump did in his first nine days:

• Held an important meeting in Washington with UK Prime Minister Theresa May, renewing and reaffirming the US-UK "special relationship" and covering a wide range of topics from trade (Trump is a strong supporter of Brexit as well as a new bilateral US-UK trade agreement), to security, Russia, and NATO. Trump also accepted an invitation to visit Britain and meet the Queen on an official state visit later this year .
• Told the executive and legislative branches of the U.S. government to prepare for, and enact, the repeal and replacement of Obamacare.
• Ordered a hiring freeze for the federal government, excluding military and the VA.
• Withdrew from TPP--the Trans-Pacific Partnership trade agreement.
• Cut off federal funding to foreign charities that provide abortions.
• Called for cuts in U.S. regulations.
• Issued executive orders resurrecting the Keystone Pipeline and Dakota Access Pipeline projects which had been halted by the Obama administration. Trump also included a provision that the pipelines use only U.S. labor and materials--one estimate of the Keystone pipeline's job creation (pdf) says that project alone will support roughly 250,000 permanent jobs in the U.S. See also Canada's Prime Minister Justin Trudeau welcomes Trump's Keystone XL decision | CBC.ca.
• The Wall's going to get built and we know the Trump administration is working on ideas of how Mexico will actually "pay for it." Trump held a telephone conference  (for more than an hour) with the President of Mexico, and issued a Joint Statement afterwards.
• By Executive Orders told U.S. government agencies and border, customs, and immigration personnel to enforce the law, ending "catch and release" and sanctuary cities.
• Held meetings with business leaders and U.S. labor leaders.
• Traveled on Air Force One to speak and meet with House and Senate Republicans at their annual retreat in Philadelphia.
• Spoke at the Pentagon at Defense Secretary Mattis's swearing-in ceremony and personally greeted the troops.
• Snubbed the Washington establishment's elitist Alfalfa Club.
• Ordered a 'defeat ISIS' plan, talked with Putin and gave Bannon a national security role.
• And much, much more ... with more to come this coming week.

I offer my congratulations to Donald J. Trump on his inauguration as the 45th President of the United States: https://t.co/1ZLjO3G7ut

— Justin Trudeau (@JustinTrudeau) January 20, 2017

President Trump is right. I built a wall along Israel's southern border. It stopped all illegal immigration. Great success. Great idea 🇮🇱🇺🇸

— Benjamin Netanyahu (@netanyahu) January 28, 2017

We have the opportunity, indeed the responsibility, to renew the special relationship for this new age. pic.twitter.com/vvOMAtPyvZ

— Theresa May (@theresa_may) January 27, 2017

An honor to have U.K. Prime Minister @theresa_may join me at the @WhiteHouse. #ICYMI- our joint press conference: https://t.co/4pHDM45Fpe pic.twitter.com/wBiWxA3sFz

— President Trump (@POTUS) January 27, 2017

The biggest problem for investors and the general public right now is getting accurate news and information without all the hype, hysteria and drama. The news media (MSM) are wellsprings of disinformation and misinformation--Trump's Steve Bannon:

"I'm not talking about everybody, but a big portion of the media--the dishonesty, total deceit and deception. It makes them certainly partially the opposition party, absolutely. I think they're much more capable than the opposition party. The opposition party is losing badly. Now the media is on the opposition party's side."

And as Mike Allen and Jim VandeHei wrote above, the sideshows and media hysteria distract from the real events occurring in plain sight and under the radar that investors (and the public) need to know about. Unfortunately, mainstream media never got over getting the election so wrong ("Trump has no path to 270 electoral votes"), so they abandoned all pretense of journalistic ethics, and wasted weeks unsuccessfully working hand-in-hand with the neo-con/neo-liberal Washington establishment in an attempt to de-legitimize Trump's election, a media crusade which probably reached its nadir with Obama's Democratic-appointee-led "intelligence community" leaking (directly or indirectly), a smear in the form of an unvetted "Russian dossier" published by BuzzFeed which was then given wide coverage through links on CNN and coverage by other major media news operations.

Read: The Reason You Can’t Stand the News Anymore. | Medium.com: "The methods used to fund modern journalism simultaneously undermine trust in the news outlets." That's right, the business models of most news organizations are broken and they are failing financially. Google and Facebook are sucking up most digital ad revenues. News media are desperately competing for clicks, and it is showing--the public have lost trust in the media. Even Margaret Sullivan of the Washington Post has taken notice.

So what's an investor (or member of the general public) to do? Unless you want to be swamped by the distortion, noise, spin, and outright false or #FakeNews, you have to carefully consider the source of anything you read or hear, and take time to curate your sources of "news and information." Here's one list I've curated.

Other Macro Economic and Investing News:

•  Jeff Gundlach predicted Trump would win, what's he think now? "It’s typical for the stock market to go up until the inauguration and then fall. It happened with Ronald Reagan, too. I think we will see something similar—it will have a pullback, at a minimum. There will be an attempt to build infrastructure and borrow a lot of money to do it. There will be potential for a pick-up in growth, an increase in interest rates, which has already happened, and potential for inflation."--Invest Like a Legend: Jeffrey Gundlach | TheGlobeandMail.com: "... being successful in investing is to understand human nature."

•  Economist: Stock Market Gained $2T in Wealth Since Trump Elected | FoxNews.com and U.S. Rally Is the Envy of Stock Markets Worldwide | WSJ.com: "... U.S. stock markets have rallied since the President’s victory more than two months ago, rising on improved economic data and hopes Mr. Trump can stimulate the economy with tax cuts and infrastructure spending while rolling back regulations. But most major stock markets around the globe haven’t enjoyed the same postelection bump, and many remain far below their record levels ..."

•  Brexit Update: London Bankers May Dodge One-Way Trip to Frankfurt | Lipper Alpha Insight | ThomsonReuters.com.

•  Trump Effect? California's stormy winter sets snowfall record for Mammoth resorts (over 20 feet in one month): "The Sierra Nevada snowpack, which provides a third of the state’s water when it melts in the spring and summer, is at nearly 200% of average for this time of year. Many of the state’s biggest reservoirs are full, and much of the northern half of the state is considered to be out of drought conditions. More storms are on the way, state climatologists said."--LATimes.com

One More Thing:  Pundits, Facts and the Future | Bloomberg.com: "News media provide an opportunity for rampant confirmation bias ... for investors, as most of what is news is not only old, it often already is reflected in market prices ... "

-- John Poole, Editor, Domain Mondo 

feedback & comments via twitter @DomainMondo
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Fortune Roundtable: Where You Should Put Your Money in 2016 (videos)

Where 5 Smart Investors Are Putting Their Money in 2016: Fortune [fortune.com]convened its annual roundtable of market experts to talk about where investors might make money in 2016. The panel included James Chanos, president of $2.5 billion hedge fund firm Kynikos Associates; Kate Warne, investment strategist at brokerage Edward Jones, which oversees $888 billion; Deven Parekh, managing partner at Insight Venture Partners, a tech-focused venture capital firm that has raised over $13 billion; Savita Subramanian, head of U.S. equity and global quantitative strategy at BofA Merrill Lynch, which has $1.9 trillion under management; and Shawn Driscoll, portfolio manager of T. Rowe Price’s $5.2 billion global natural-resources equity strategy. Here are videos of edited excerpts from the discussion. Moderator: Joshua M. Brown, CEO, Ritholtz Wealth Management. 


Here’s Where You Should Put Your Money in 2016 - Published on Dec 9, 2015 ("stay away from healthcare")



Investors Roundtable: The S&P 500 is Flat for the Year - And could be stuck there for a while.


Tech Will Continue its Winning Streak in 2016 - There’s plenty of room for investment opportunity.

Get Ready for $30 Oil - The future of commodities, raw materials, looks grim. 
(source: Fortune)


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