#HongKongEconomy #USStockMarket #FinancialSurvival #InvestmentStrategies #WarrenHLau #INPressInternational
INPress Editor: Good afternoon, Warren H. Lau. Thank you for joining us again. You've made some intriguing statements about China's current market rescue efforts and their implications for global investors. Could you elaborate on why you believe China's move to lower reserve requirements is aimed at attracting funds from the U.S. stock market?
Warren H. Lau: Thank you for having me. China's decision to lower reserve requirements is a strategic move to attract capital from the U.S. stock market. As the U.S. market reaches its peak, investors are looking for alternative markets to park their funds. China's actions are designed timely to make their market more appealing to these investors.
INPress Editor: Interesting perspective. Based on this, what investment strategies would you recommend for the next month?
Warren H. Lau: Given the current situation, I am already preparing short-term trade in Chinese securities firm stocks. Hold them until the end of October, then liquidate your positions and hold cash in anticipation of the U.S. elections. Once the results are out, consider shorting the U.S. market. It's likely that the Hong Kong economy and property market will take another hit. Wait for the dust to settle before bottom-fishing in Hong Kong real estate, developer stocks, and retail stocks.
INPress Editor: The rise in Hong Kong developer stocks seems uncertain. What are your thoughts on this?
Warren H. Lau: The current uptrend in Hong Kong developer stocks is puzzling. It's hard to determine if it's based on solid fundamentals or if it's just speculative. Investors should approach this market with caution.
INPress Editor: Many Hong Kong retail companies have seen their profits plummet. How do you view their future?
Warren H. Lau: Despite the sharp decline in profits for many Hong Kong retail companies, from peak annual earnings of several hundred million to just tens of millions, the key is that they remain profitable. With 90% of companies currently operating at a loss and shop rents of the CBDs down by 95%, surviving the next nine months will make them the best of the best. In such times, earning tens of millions annually can position a company for significant expansion during the early stages of economic recovery, potentially making them a dominant player for the next decade.
INPress Editor: You mentioned the survival of mammals during the ice age as a metaphor for today's economic climate. Can you explain this further?
Warren H. Lau: The ice age is a perfect metaphor for today's economic challenges. Just as mammals like rodents survived while larger, warmer-blooded animals perished, so too will the most adaptable companies survive the current downturn. The key is not to be the strongest, but the most adaptable.
INPress Editor: What do you see as the primary goal for businesses and investors over the next nine months?
Warren H. Lau: Survival is the primary goal. The fittest will survive, not necessarily the strongest. Companies and investors must focus on staying afloat and positioning themselves for the eventual recovery.
INPress Editor: Thank you, Warren H. Lau, for your insights. Your analysis provides a clear roadmap for navigating the current economic uncertainties. One more question: Why do you specifically mention nine months as a critical timeframe?
Warren H. Lau: The nine-month period is crucial for several reasons. Firstly, I anticipate that the U.S. stock market will turn bearish in November, and the subsequent downturn will be catastrophic. Over the past few years, the Hong Kong stock market, real estate environment, and business environment have been depressed. Currently, those with significant purchasing power are likely U.S. stock market investors. Therefore, when the U.S. market crashes, it will inevitably impact the Hong Kong economy once again.
Additionally, the Hong Kong real estate market has another problem of oversupply. U.S. interest rate cuts are unlikely to change this situation significantly. However, if the U.S. crash is too serious and they decide to bail out during November or December, then the bailout capital could provide a supporting effect for the Hong Kong real estate market.
INPress Editor: That's a comprehensive perspective. Thank you, Warren H. Lau, for sharing your expertise with our readers. Your insights are invaluable as we navigate these challenging times.
INPress Editor: Thank you, Warren H. Lau, for your insights. Your analysis provides a clear roadmap for navigating the current economic uncertainties.
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