Chinese Engine Powers Global Growth

Published on
August 14th, 2017
28 minutes

Chinese Engine Powers Global Growth

The Interview ·
Featuring Tim Guinness

Published on: August 14th, 2017 • Duration: 28 minutes

Equity market veteran Tim Guinness, takes us on a global tour of the valuation cycle, assessing the relative differentials between US, Asian and European stocks. Sharing his insight on China and what it can do for the global economy over the next two decades, Tim also discusses innovation and what to look for when selecting fast growing companies from a value perspective. Filmed on July 18, 2017, in London.


  • JM
    James M.
    11 September 2017 @ 09:36
    Don't know where to start. I think these guys are extracted from reality. The middle class in the USA is getting crushed as they should for believing in Reaganomics bullshit. The populous get the government they deserve as Jefferson said. PRIVATE banks in Europe/USA LOL hahaha seriously. Perpetual growth on a finite planet in resources catastrophic decline, a market that is about as FREE as any former soviet centralized system, Environmental collapse globally , political corruption globally on a scale reminiscent of the Roman empire in the final stages of its collapse, etc etc etc etc blah blah blah I know we have heard it all before and I bore my fukin self sometimes. Lets go get on the same drug as this guy and all be happy lol fukkkk me lol.
  • sp
    shashwat p.
    31 August 2017 @ 08:43
    he should have talked more about how to manage the capital controls in China. Very bullish!
  • AC
    Andrew C.
    31 August 2017 @ 03:26
    @Tim: It's hard to see China going from 11K to 60K GDP/capita under the current political and economical regime; almost impossible, actually. Can you explain how this can occur?
  • RM
    Robert M.
    25 August 2017 @ 15:46
    Looks like his fund has matched market performance with more volatility:
  • AE
    Alex E.
    19 August 2017 @ 01:15
    As has been stated elsewhere in this comment section, this guy's trying to blow smoke...1982 didn't have a World Debt level of $225 trillion dollars. It didn't have China with a 300% debt to GDP level. It didn't have the Euro zone printing 60 to 80 billion Euro a month. It didn't have the U.S. with a $20 trillion dollar deficit. The World population was young compared to the coming wave of retirees all over the World. When those retirees cash out, markets are going to go down, not up, so I really don't see this man's optimism. The selectivity of his research would make me cringe with respect to investing in his funds. I do not agree with him at all.
    • RM
      Robert M.
      25 August 2017 @ 15:19
      I watched about 5 minutes of this interview and totally agree with you. Levels of debt and the difference in PE compared to 1982 makes the two dates non-comparable. China has to be in a perfect world to make any of this happen and they have to grow to the #1 economy in the world, which over decades they will do, to drive another 1982 bull market.
  • SM
    Stephane M.
    25 August 2017 @ 10:29
    My little girl broke her pink bike glass yesterday. Maybe he should too ;-)
  • AB
    AJ B.
    22 August 2017 @ 18:26
    Was the bank of Scandinavia in the 90's controlling the 2nd largest economy in the world, and the main trading partners with half the world? To compare it to China at the moment is a tough sell.
  • EG
    Eric G.
    20 August 2017 @ 05:14
    Be sure to bring him back in 6 months, 12 months, etc to revisit his thesis.
  • TS
    Tarang S.
    17 August 2017 @ 20:23
    Worst interview all year.
  • JT
    Jan T.
    15 August 2017 @ 08:29
    The first part was slightly interesting. The second part really was a advertorial. i.e. Our fund is in this top list that top list. "We must be doing something good". In fact on that subject. At some stage I think the yearly subscription could go significant down IMO, as Realvision gets bigger the audience to which the guys here can pitch their funds and raise assets becomes highly lucrative. It’s a different concept. But for a guest to tell about how good his fund is, and that it invest in innovative companies provides hardly any value for a paying subscriber.
    • KK
      Kevin K.
      15 August 2017 @ 17:46
      Agreed. Further, On the face of the interview I was expecting more of a deep dive into particular sectors/companies rather than a praise thyself and remain ambiguous in a lot of his responses.
    • JL
      J L.
      15 August 2017 @ 17:52
      that would make sense if the guests paid to appear on here which they dont
    • JT
      Jan T.
      15 August 2017 @ 21:05
      Thats what you tell me.. that they are not paid. I don't know that. But even if they would, I don't mind actually, as long as the content is good and this should reduce the annual membership fees in the long run. Perfectly understand how the industry works, marketing is key. In particular for the active fund management industry. Have you guessed why everybody is on here is so negative and bearish about ETF's? Who primary preaching this? The ones who are impacted the most:: Active fund managers, hence there is a lot of "We must be doing something good", "We are number one on Morningstar" etc.. There is a reason why there are not ETF providers or ETF supporters on here.. they dont need to...
    • JO
      Jens O.
      16 August 2017 @ 07:13
      Couldn't agree more to the discussion ... similar thing happened imo ten days ago with Bill Strazzullo (Grant: "Bell Curve Trading a whole new approach to trading" - really? Please, don't tell Peter Steidlmayer ...) which was also close to advertorial ...
  • PS
    Paul S.
    16 August 2017 @ 03:54
    This guy sounds like a business development manager talking to financial planners
  • PD
    Peter D.
    15 August 2017 @ 22:16
    Nothing wrong with this type of presentation, despite the many weaknesses that were pointed out (its "advertorial" nature, the ludicrousness of removing financials & energy from CAPE calculations, the guy's past performance talk about one fund, in one period, ignoring all the other funds and discontinued funds he has been involved with etc....). Frankly, the priceless sceptical look on the interviewer's face, who politely stood back, and let this guy talk, told the whole story.
  • AH
    Andreas H.
    15 August 2017 @ 18:30
    The gentlemen has it all right :-) Great interview!
    • AH
      Andreas H.
      15 August 2017 @ 18:51
      oh by the way, I knew in a split second that he is (even secular) bullish, because he had so much thumps down...
  • BG
    Bruno G.
    15 August 2017 @ 18:19
    My heart is warmed that so many down voted this discussion. Their is still some degree of sanity among investors
  • EB
    E B.
    14 August 2017 @ 23:28
    This interview doesn't belong on RV because he alludes to valuation measures that are POORLY CORRELATED WITH SUBSEQUENT RETURNS (forward PE sucks, CAPE is so-so). Using better correlated measures like Buffett's marketcap/gdp or Hussman's market cap/ GVA, we are wildly overvalued with record overvaluaton for the median stock. It's ok to have different outlooks (for example, someone argues government will intervene to save stocks, or inflation will render stocks attractive) but let's not debate the actual numbers. Math isn't subjective. This interview belongs on CNBC. And you've had a few other guests like him, btw.
    • js
      jacob s.
      15 August 2017 @ 00:53
    • us
      ujjwal s.
      15 August 2017 @ 15:34
      Liked your opinion on CNBC.
  • TR
    Thomas R.
    15 August 2017 @ 14:29
    I also appreciate hearing views that differ from my own. For me one of the biggest differences for the US Market between now and 1982 is in 1982 our debt to GDP was 34% rising off the 31% low it hit in 1981 from the post WWII former high of 119% in 1945. Our current debt to GDP domestically is approximately 107%. I don’t have the same comparison for debt levels in 1945 or 1982 worldwide. As we’ve heard numerous times the overall world debt to GPD is currently over 300%. The overall US Macro circumstances appear dramatically different, arguably opposite those that existed in 1982. Certainly it would seem that the US doesn’t have the same capability to double Debt to GDP like it did from 1982 to 1992 driving infrastructure and military spending. His statement that the US population is growing needs to have an asterisk by it to address current immigration policy which could be a deterrent to population growth. I would offer that a huge tailwind for the markets these last 35 years from 1982 has been overall interest rate declining and the huge bond bull market all of which generally appears to have ended. He did address interest rates in the presentation but did not address debt levels in his analysis. Going forward, in the world of probability, it’s hard to imagine anything but a headwind for the US equity markets with the levels of debt and inability to grow faster than deficit spending going forward. For US equity markets to rise over the next 10 years without a serious correction, it would seem that interest costs would need to remain low or flat line and the US debt continue to be monetized, despite occurrences’ of inflation along the way. The actual effect of rising rates to the US deficit lags based on debt maturities – much like turning a large ship. With a time horizon of at least 10 years, it’s hard not to imagine not having huge re-set similar to 2007-2009 The growth of China’s middle class and being overweight China does make sense and China’s growth can drive world markets and likely will over the next 20 or 30 years. Their bank is government owned and does own their debt so that could play out in a manner similar to Japan.
  • RM
    Russell M.
    14 August 2017 @ 22:15
    I think it is correct to at least footnote that 2 out of 10 years of cape data are irregular samples.
  • SV
    Steven V.
    14 August 2017 @ 19:19
    Even though I disagree with his view, I appreciate that RV interviewed him. Many financial advisors have been selling their clients on the belief that the stock market is going to boom like it did after 1982. While I don't see that, it's nice to get an understanding of where this view is coming from.
  • DC
    Dan C.
    14 August 2017 @ 19:16
    Nice to see a counter argument against bear case but i think him somwhat deluded taking data out of the CAPE to curve fit his hypothesis.
  • DG
    Daniel G.
    14 August 2017 @ 17:07
    That exercise in CAPE projection 5 years forward is just bonkers. He may be right on market direction but I don't at all agree with his reasons why.
  • SH
    Steve H.
    14 August 2017 @ 15:37
    1982? The delusion... all economic figures are exactly the opposite of 1982. I so tire of the, "if you take all the bad stuff out of the numbers" argument.
  • TH
    Thomas H.
    14 August 2017 @ 11:37
    He initially compared this stock market to 1982.
    • TS
      Thomas S.
      14 August 2017 @ 15:11
      Curious, indeed.
  • DJ
    D J.
    14 August 2017 @ 15:08
    He seems to be selling a value produvt in and overvalued marked?
  • TH
    Timo H.
    14 August 2017 @ 14:43
    This guy does not seem to worry too much about the totally distorted/destroyed credit market.
  • OT
    O T.
    14 August 2017 @ 14:08
    I have two points where I struggle with the logic of this presentation: 1. CAPE is in the "red" zone, but if we remove 2 of the bad years, then it is just 19.2x. Isn't the point of CAPE rolling 10 year window to include good as well as bad years and average those? Not to mention that 19.2 is probably 20% above average. 2. So if the 5 year forward looking CAPE may not be looking extremely hot (like 2000 hot) let's now remove the banking and the energy, which BTW are probably the only reasonable PE sectors and see what we get. Somehow we got acceptable US valuations comparable with the other DE markets. I am lost.
  • PU
    Peter U.
    14 August 2017 @ 13:51
  • OT
    Oliver T.
    14 August 2017 @ 13:32
    some interesting parts but overall very floaty and full of data selection bias
  • PB
    Pieter B.
    14 August 2017 @ 11:02
    Very refreshing! I am one of those critical pundits on china/overvalued stocks and hence it is great to get opposing views. Thank you!