Long #China Short #CCP

Y'all gotta leave your political biases behind when you're commenting here. Russell sees opportunities in the Asian countries and China and sees EM doing well, and people get in an uproar bc they are "America first." He's not supporting socialism or communism.

The CCP would call this guy a "running dog".

Why is a drunkard on RV? He looks like he's high

I really got a lot out of this interview, the point of more trade growth being possible in countries being connected under the One Belt, One Road than in trade with US is plausible to me having seen some of the infrastructure first hand as far away as Africa and how hard people are working to improve their lives. Also recommend the book they mention, The Silk Roads: A New History of the World by Peter Frankopan. I'm a few hours into the audiobook, narrator is excellent, and finding it very fascinating if you like history. For instance, Rome had such a trade imbalance with China in the first century AD nearly half the coins minted were flowing outside the Empire along the silk roads to China. I didn't know trade imbalances with China went back that far. Lol

Really great interview.

Such a terrible view, he completely let’s his liberal view clouded his investment mind. Or whatever he was taking before that interview.

Perhaps I’m weird but this is my favorite interview of the last couple months. I’m basically just doing what this guy talked about from here going forward. Perhaps it’s early.

A couple of comments here: 1) Look at what China is doing on the Indian border. Why would India want to trade with a country that threatens its borders? Serious question. While India has imported a lot from China previously, I would like to hear his take on how India imports huge amounts from a country that they might fight a war with or will fight a war with. To anyone who thinks this border row is recent, please check online. There was 1 war and have been multiple incidents along the border. There is a lot of talk in India about boycotting China since the most recent border standoff started. Furthermore, some of the other OBOR countries have maritime border disputes with China due to South China Sea claims. Malaysia has backtracked on a few of these projects. How does he make this work if countries that are the "trading partners" have border disputes? I ask this because of how China is behaving in a post COVID world. 2) Bangladesh and Pakistan being touted as major importers... This is questionable in my view. Pakistan has gone from one failed government/country to another. Bangladesh imported 3.89 MT of LNG in 2019. Does China make LNG? Last time I checked, not for exports. Furthermore, other importers of LNG will fulfill their requirements by major exporters. His view on commodities is interesting, don't get me wrong, but I struggle to see it. The only way these countries have a substantial increase in demand for commodities if their economies start booming AND they can channel capital flows correctly. The fact of the matter is that this might not happen even with good demographics. 3) The impact of the coronavirus is also not being considered in my view. Countries are moving their production out of China prior to the virus and have accelerated the process after. Japan is paying companies to leave according to the news sources. South Korea's Lotte Group was basically forced to leave due to geopolitical reasons. It would be interesting to hear his take on ASEAN importing a lot from China if a lot of manufacturing capacity is relocating to ASEAN itself. I respect his view and thesis, but I feel it was not communicated in the best way and lacks some of the fundamental understanding of what goes on in some of those countries he is banking on. I also find his view to be, well, very skewed. He has not addressed China's demographic issues, huge debt burden, cold war 2.0, and how countries will see China going forward and how China sees itself going forward.

Amazing, thank you RV

Clark’s Hedge Fund Plunges by Record 35% as Short Bets Backfire. A spokeswoman for Horseman Capital Management confirmed the numbers. “This year has not worked out as planned,” Clark wrote to clients last month, signaling that he was sticking with his bearish wagers. “I increasingly hear talk that central bank and government activism has ended recessions and possibly bear markets. Maybe this is true, but it seems to me that we are at a turning point.” With his assets rapidly diminishing, Clark is facing a race against time to save his fund. He is one of the last short sellers left who’s willing to make such directional bets amid a rising market. Horseman Global Fund managed $241 million at the end of November, down from $1.7 billion at the end of 2015. source Bloomberg.

I keep hearing US ‘bungled’ Covid response. Can someone explain? The survival rate for people aged 60 and below is north of 99.9% in US. The overall monthly US death rates are statistically no different in the same months of 2019 and 2018. Sounds like Joe Biden’s speech writer talking.

Great to hear another point of view! He’s always fascinating to listen to.

Somewhat a contrarian piece, still won't be putting money into China and support the authoritarian regime. EM markets which would eventually benefit regardless of China seem the better idea, yet probably still too early.

Yup, this is great, thx guys!

Thank you Russell and RV.

In the last 13F filing for Horseman Capital, you can see their 3rd largest position ($4M at the time) is Luckin Coffee (LK). Avg. estimated price/share was 30$. Keep that in mind, when listening to their CIO.

There is a part that I did not understand and would appreciate some clarification. How is strong dollar and low commodity prices a natural depressant on China’s export numbers as Russell Clark mentioned (around 25 min remaining in the conversation)?

Was this cat on drugs? His slurring and eyes... Hmmm someone I want to take advice from.

Russell Clark is one of the smartest brains in macro. Ignore him at your own peril.

The criticism of this interview seems to indicate the real vision base has now transitioned to CNBC viewers trying to find the next day trade. For you critics, good luck with your wealth. Investing is not about politics, it’s about abandoning biases and thinking about the future. Russell does that and raoul serves as a great interviewer. If you disagree, certainly downvote me or save your time and do whatever the dudes with ponytails do at noon on CNBC.

Russell has always been a contrarian and describes his view pretty well. He backs up his position with data and anecdotes. The only concern that I had is he seems to trust the data and information coming from the CCP. I can see the growth in China --- just not sure that I would put a lot of stock in the government data from there. Still great interview -- this is exactly what I except from Real Vision -- talented individual with a unique view point of the future (even if it is not what most Americans want to hear)! Thanks Raoul and Russell!

I disagree with his "buy China" conclusion, but agree with the idea that a new trade axis is being built around the ASEAN nations. A better way to play this might be to take another look at Raoul's Monsoon theory and buy frontier markets that have the demographic tailwind and are the next geographies to see outsourced manufacturing and capital creation.

For what it's worth I lived and worked in China for 13 years (Beijing & Shanghai) and won't invest a single $/RMB there anymore. Repatriated everything. Now investing in US. Jobs, manufacturing and innovation are all coming back.

I've traveled and worked in southeast asia off and on for years, and I can say there is plenty of anecdotal, "on-the-ground" evidence supporting what Clark says about China's penetration into nearby markets, many with young and growing populations and already upward trends. It's always difficult to predict timing, but it is hard to dismiss that enormous growth is coming to this area soon. It's good to see RV making a real effort to consider merging and frontier markets. To many Americans (and most ETFs) "emerging" means a lot of China and a little of India, and not much else. But Indonesia has nearly 250 million people. Southeast Asia has over 650 million. Include other parts of the Pacific and South Asia, and there are literally billions of people *outside* of China and India in this region, including markets like Myanmar that sit near huge neighbors and are looking at rapid growth after decades of isolation. I also like Ed Harrison's description (another video) of this region as a "BATNA" for China which the US is under-estimating. Without turning this into politics, I think from a bi-partisan perspective that the US pull-out from the Trans-Pacific Partnership may look very unwise in just a few short years ...

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Another great interview, great perspectives!!!

Im impressed..thank you for fixing your buffering. It helps like where I am where internet is slow and bandwidth is limited...thank you RV!!

Interesting conversation....plenty to discuss and debate.

Being pro-china is in no way contrarian. All major investment houses peddling investments with the China A shares storytelling luring in institutional investors. To be contrarian is to say "no" to facilitating flows of hard $ into CCP supported companies (like e.g. Huawei). To those glorifying technological advances of the basically national-socialistic regime of China I'd recommend reflecting on nazi Germany of the 1930s building state of the art infrastructure and technology of the time. Grow a f*cking spine.

Mr. Clark is no doubt a big thinker and very intelligent however he does have a way of not answering a question directly, which is irritating. It would be interesting to have Kyle Bass on to debate him on his bullish views of China. Finally, there is little actionable here for the personal investor.

1. Does the CCP have money in his fund? Serious question. 2. If the West lets China take over after everything that has happened we deserve that future. 3. I would love to see Kyle and Russell square off in a debate. 4. In the last few weeks, China has threatened Canada, England, Australia, India and the USA. The CCP is acting like a mob boss on the world stage. In what world does the West trust them? Or other countries in Asia for that matter. They invade Taiwan and what's to stop them from going after the Philippines? 5. In a world filled with robots and debt.....how are China's 1.4 billion people an advantage? They are liabilities to me.

Not a fan of this one. He sounds like he works for the CCP. Maybe I’ve got home country bias, but overtly betting against the USA innovative machine is usually a mistake. As another post mentions, perhaps that’s why he was down 35% last year (may not be true...jus repeating what another posted.)

This Globalist and his way of thinking is core to the problems the American people face in the USA. Thankfully, that time is coming to an end.

A Disclaimer to Viewers should be given - His hedge fund lost 19% last year and has shrunk from $1.5bn down to sub $250m. This does not negate his bullish views on China but adds some perspective. No choice but to be contrarian to grow AUM on the back of that past performance....

Point re trade with belt and road countries being larger now than US, highly possible this is China trying to undercut local competitors in those areas, in which case their profit margins will be significantly smaller... Unfortunately I don't know how to test this hypothesis!

I have many connections in China and what Clark said is very true. I need to know how can we capitalise on this?

Hello to all, Do you guys have any idea of how to play an oil recovery? Any good oil companies with low cost production to look at? And with good balance sheets to avoid insolvency while that happens?

P.S I am very dissapointed about this episode. Russell Clark seems like a Chinese shill.

I have to disagree with Raol and Russell. The U.S is Not against China. It is ONLY against the Communist regime. The Trump administration has addressed this very clearly. In fact, the U.S has been building Communist China for many decades. An Asian country and USA can be both economically powerful and coexist in harmony. We can find the examples in Taiwan, Japan and Korea.

I admire Russell Clark so much and in so many ways. As a fellow money manager, I was empathetic when hearing how his AUM had taken such a big hit. Many of us who survive have experienced this, though many more who have are no longer in the game. Moreover, I love his intellectualism, sincerity, and contrarianism. I am looking forward to the day his performance again reflects his superior level of thinking. Horseman was over +40% YTD at the March bottom but is now only +11% YTD with the rebound so I don't think we are yet at that point.

This is a really first class discussion. Thank you. I would love to hear more about Chinese expansion into Asia, maybe from Taiwanese, Japanese and Singaporean economists/academics (ie people who understand it, but see both the positives and negatives for regional geopolitics). Thanks again

a real contrarian!

Love the way Russell develops his theses. Helps me to consider a different viewpoint and for that I’m most grateful. 👍🙏

By the way re Xiaomi, I have owned two of their phones and both eventually broke down. Not exactly a mark of quality. Not sure why at this point anyone would buy Chinese phones although I do get the joke that Apple and Samsung have become exorbitantly expensive and the Chinese phones are cheap.

This was refreshing... And walked us through his reasoning and logic.

3 out of 4 comments so far negative. The man must be onto something.

Is this guy a Chinese Shill? As an Australian I absolutely do not support CCP belt and road investment here

It's very refreshing and different from those who only spread gloom and doom against China and Belt +Road. It's clear to me that China is playing a very long game with sound strategy vs "no adults in the room" US. In light of this HK sanction war, EU led by Merkel is taking a very opportunistic stand with China. US and UK might find shorting their own feet soon and so goes USD hegemony.

Great points about the dangers of the US weponizing the dollar. US only sees their power, not the risks of what happens to their global influence with countries left out (most of the world). I agree that ASEAN sees to be a place both China and the US are looking to invest in. I'm not sure how China's imperliaism in the South China Sea fits with this move. I do also share some of the concerns voiced over his views on China. Hard to separate China from the CCP. No arguments that they've created an economic powerhouse and they are playing chess while the ROW plays chequers. But the CCP is a brutal regime at heart, so I find it hard to listen to what came across as a vindicaiton of their policies. I say this as a global citizen who lived in HK from 2008-2018.

would love to see more discussion on passive investment and it's relation to 'safe stocks' which make up the majority of ETFs

I was drinking while watching this too ;)

You must realize these investment advisors what they say publicly , they do the opposite with their own $$$$$$. You must do your own research and look at their action not their words.

China vs US while the Captain of one of them clasps a boat wheel disconnected from the ship.

This guy will make a lot of money, and then the Communists will confiscate all his wealth using all the money he invested in the Communists

Years ago, the Chinese Empire tried isolationism and it did not work. It is interesting that the driving force of America today is isolationism. This plays into the hands of Russia and China who are rushing into the political vacuums as the US exits - Asia, the Middle East, Europe and Latin America. All this isolation to protect manufacturing corporations with robots within the US. Instead of so many negative knee-jerk reactions to Mr. Clark's macro view, we should be analyzing where he is correct and what can be done about it. The US isolationism is a recent phenomenon as is the attempts to bully our allies to join us in sanctions. Is it really in our long-term best interest? Think about it. Do not just hide in the past. DLS

Mr Clark was so pro-China in this interview a jokingly expected him to break into Mandarin halfway through. Then I wondered what his investment book was, and turned up these bits: "The Horseman Global Fund, run by the career contrarian Russell Clark, lost 35% in 2019, its worst year ever." Ref - https://markets.businessinsider.com/news/stocks/russell-clark-horseman-hedge-fund-losses-bets-against-2019-market-2020-1-1028791743 "Horseman Capital suffers big losses as stocks rally." Ref - https://www.ft.com/content/6d904558-6cc6-11e9-80c7-60ee53e6681d Horseman Capital’s Russell Clark has been bearish for more than seven years. And if he’s wrong? “This could be my farewell interview,” he says. Ref - https://www.bloomberg.com/news/articles/2019-05-10/a-short-seller-bets-it-all-on-a-spectacular-market-crash And finally, from the Market Insider piece -- "Now Clark is in a race against time to save the fund, which had about $241 million in assets at the end of November, down from the $1.7 billion it held in 2015, Bloomberg reported." I think I'll be passing on his "excellent" advice. If he's willing to suffer a drawdown of 85% in assets, I don't think he has a clear view of anything -- Especially China. Also Raoul, I don't understand how you can say "The world seems to change every 10 years" and then say "everyone seems to be getting pulled into this narrative (about China)" as if it isn't the very change that you are describing. Puzzling indeed.

I am of the opinion that the chinese had done all the ground work in changing the future of global trade on the basis of a weak US under Donald Trump. The HK move signals the beginning of their plans

Like nearly all the find managers RV interview, he ducked the question as to how he would go about trading his thesis spectacularly! He spoke continuously for 5 mins and weirdly drifted on off topic to talk about gilts!? What annoys me is that Raoul accepted that superfluous answer and moved on to the next question. The RV audience should stand united on this. We pay a subscription fee to listen to these guys who are clearly affiliated sponsors. How about you set some ground rules and insist in advance that they give some value away in the form of tradable ideas. It’s not like we are asking for a portfolio snapshot.

Refreshing to hear someone finally point out that the US losing its way and pulling away from world leadership. Not something that happened overnight. It has been maybe 15 years or so in the making and maybe accelerated in the past 5 years or so. Nothing political here - I do not live in the US - just a fact.

Enjoy Russell Clark always - his style and logic behind his thesis. Whether we agree or not is a separate issue. I do think commodity inflation is the next event that the market at large has ignored and will be its next "surprise". He hinted at his change of view but the reason for it was not got into. Nor did Raoul pick up on that although his deflation view/weak commodity prices is well known. Does not detract from the quality but I agree with other viewers comments that the dialogue/responsiveness between Raoul and Russell was missing here. It was as if a prepared script was followed; not so much an interview/discussion.

Russell is one of the most interesting and insightful commentators on Real Vision. Only natural that he's an Aussie really..

Great interview. I think if was a very fair point the speed at which China whisked people away from their family's who tested positive, undertook temperature testing checkpoints everywhere and built hospitals in record time. Hope to see you back.

Referring to the US's financial/economic elite by saying "there are no adults there" = spot on.

Interesting take on India in all of this. The next investment cycle could be something quite significant going forward.

In my opinion we should have nothing to do with the CCP

Kyle Bass is wrong on China..This Guy is spot on IMO, it will cause a War on Tech, Currency's, Trade, Embargo Etc. This has been building for 2 years now and it's going to get much much worse

Unlike many of those commenting here, I found this a fascinating, original and very thought-provoking conversation. Russell is brilliant and a deep thinker - that much is clear, and always has been from watching him over the years. But he didn’t really address the most important question here - not just the broader trends and dynamics he sees emerging, but more specifically how one would set themselves up to trade and invest around that core thesis. This is my only constructive criticism of the interview— other than that, a wide-ranging and contrarian take.

Many thanks for the great interview, really appreciate view of Russell on China. I sailed to several islands in the Caribbean and the South Pacific Ocean and talked to the locals: The infrastructures like road, bridge and marina are all financed and built by the Chinese, for sure they don't do it for free, but at least on a fair basis. China will experience a difficult period coping with US, but I have more faith in a country that is able to follow through on its strategic visions. Just my two cents, and being half Chinese I am biased to a certain degree.

I found Russell Clark's theses thought provoking in some ways. But... 1. Referring to Huawei simply as a good product ignores obvious deeper implications of Chinese efforts to restructure internet standards into the ultimate surveillance tool for totalitarian society. 2. Praising Chinese handling of Covid is bizarre. (ie. silencing of Taiwan through the WHO, official stats, attempts to suppress doctors breaking news etc) 3. TikTok, another significant theme of the discussion, has major surveillance and censorship issues. If no one cares whether we head into a full-on dystopian society, I guess it doesn't matter.

Don't know if he is right or wrong, but he sure seems to put a lot of trust in what China says it does/is doing. I just don't think China is trustworthy.

China uses MMT to its total advantage. It will dominate Asia and Africa over the next 5 years and beyond.

There was something Russell Clark mentioned I totally did not understand. While he was a bit opaque on strategies, he mentioned what I call "shorting the box". I've always thought of this as a tax strategy (to convert a short term gain into a long term gain), but otherwise why do it? Aren't there also margin requirements EVEN if you own the security - which is an opportunity cost. PLEASE HELP!

A contrarian perspective, insights there!

Good job of RV to provide an unbiast view. Personally there is some merit to the idea.

Raoul - watch this as a great crisp way to analyse future from macro . (ignore crypto aspect to just see overview). great first 15 mins https://www.youtube.com/watch?v=NSGjau5YvBE

I could not follow this guy. Silk Roads did not put me to sleep but he did!

I feel like I say this every time, but one of the best interviews.. if you understand the history of China and layer the belt and road, it seems unstoppable in many ways, although everyone seems to know China is in danger of imminent collapse. What I love about Clark’s more nuanced view is that it’s from a very practical/value based assessment of productive capital outlay, something that is conspicuously missing in the west, despite the financial acrobatics. I love this thesis..

Another great interview! One of the most interesting. Up there with Howard Marks and Kyle Bass...how about a debate with Russell and Kyle?

Outstanding! Great that RV has both this and the great Kyle Bass video.... And as Louis Rukeyser used to say, "and one of them might even be right someday...."

Excellent and thought provoking. This is what I was waiting for - something to properly challenge the default (including my own) convictions. I will reflect on this.

Not sure I understand Raoul interviewing a guy running a $130 MM fund but letting the most junior staff member interview Ross Beatty. There was more to be learned from Mr. Beatty.

Mr. Clark is a legend in investment business. I just have small issue on his position, how can you have a creative minds under communist system. Would Mr. Clark go & be a Chinese citizens for all the potential growth that he sees. Amazing over 80% Chinese youth want to migrate to USA?????

Wow that was so good I hated every minute of it! The most contrarian view on RV so far.

A nice refreshing change from Kyle Bass racist propaganda 😀

Thanks for the show, picked up some nice points. It would be great if Russell talks about his massive short early last year. Very interested to learn what he thinks now

Unfortunately (if you’re a US citizen like me) he’s likely correct in his prognostications.

Great interview. The main stream media never give both sides of the story. It is refreshing to hear the other side. The U.S. has used the reserve currency to alienate itself from every one, now a lonely and hollow helium balloon that will pop. Sad! Let's have a peaceful handover.

Guy is spinning a narrative. He lost me at the idea China did a good job of managing Corona. Any idiot that looks at the log graph can see China "decided" the virus was over on FEB 12 2020. Dude is just talking his book

I'd absolutely love to see Kyle Bass interview him. I'd pay for another tier infact!

I always enjoy Clark's independent views. They never come with the "company guy" bullshit you typically get. I did find his view on the US v. Huawai odd. If i understood correctly, he believes that US policy vis-a-vis Huawei is confused. I would argue that is precisely backwards. The US policy was confused until 2016 or so, but has since been rationalized. No rational country would allow an increasingly hostile country to build out and maintain its critical infrastructure. Building out a significant communications backbone? Nope. This view seems to be along the line of the naive dogmatic free trade view, which I used to hold. Essentially it holds that the ultimate goal of a country is to maximize wealth in the short run through comparative advantage and trade. The problem is this overlooks a country is more than an economy, and if you outsource your industrial capabilities to make medical supplies or microprocessors or avionics, you might find you don't have a country left after the next pandemic or war. Reversing 40 years of increasingly globalized supply chains is unlikely to happen quickly as they have been built out with significant capital investment, and it of course may not happen. The interesting thing to me though is that it would still lend itself to Clark's investment view, which is generally long EM/commodities/value over the next full cycle.

The fundamental error that Russel Clark is making is a complete and total divorce of fundamental economic factors with the moral and spiritual fabric that underpin those economic factors. China's primary engine of innovation the last 10-12 years has been stealing foreign technology and then improving it. The reason they have to steal? Their own citizens are terrified of having any new ideas of their own - they know that if they have a new idea and it fails, they will go to jail or be killed. Increased trade with people in other authoritarian nations where that dynamic exists just the same will not stimulate innovation leading to growth. This is a historical principle that has proven itself true time and time again. China may look like it is leading the world in initiatives right now, and it may last for several years longer, but it will not last for a long time unless they change their fundamental governmental structure away from the totalitarian model they follow. They are unwilling to do that, because for them the control of the Chinese Communist Party is far more important than the long term benefit of the people of China.

Can we please get Russell Clark and Kyle Bass to debate.... PLEASE = )

The Thucydides Trap suggests The Number 1 most powerful nation but in decline (USA) usually gets into conflict with the Number 2 rising power (China) through a 3rd party. Taiwan is that 3rd party, It is inevitable. It is going to happen. The only reason China hasn't invaded is because of US support who is still the superior naval power. China will only invade if they can guarantee victory. Taiwan can defend itself and cause severe losses to the Chinese even though it is small. Think of how Vietnam and Afghanistan in the past have been unconquerable by far superior and powerful nations than itself i.e. USA, Russia, China. China invading Taiwan has a probability of ending CCP rule.

look smart but stupid type of thing, right on deatils but wrong on substance

The guts of his thesis about middle earth makes sense. Comments about iron ore and china exporting steel were insightful. But like all the recent videos it comes back to timing the transition from deflation to inflation. Nobody knows.

Finally a perspective not anchored in american nombrilisme.

Ok, China fan boy. China has locked capital flows, no one wants it’s currency, it holds countries like Germany and Ecuador hostage, and has an aging demographic. No sure how it will get foreign investments as it is pummeling its PR and financial arm of HK. It is harder to get your consumer to spend than export cheap goods around the world.

Fantastic counterpoint to the RV dominant debt deflation outlook. I think they can live together comfortably in my mind, though the effect of a rising versus falling dollar poses some short term friction. At this point, for us feeling driven to deploy our capital at least in part in productive business with a value and fundamentals matter approach, foreign and emerging markets seem like the only outlet. This leaves me with a 25% bonds, 25% gold, 25% cash, and 25% foreign value equities allocation. This interview was among the best along with Raul’s Unfolding and Lacy Hunt. Awesome job again.

Chinese have done a better job at managing debt?

"it's good to have a country with democracy and freedom imprinted into its DNA as the world's largest economy, but does that mean I have to suffer economically to maintain that position?" The MAIN reason why the world (third world countries) has enjoyed free trade for the past 50-60 years, which is a complete anomaly in world history, is because the biggest democracy has provided security across the entire globe for oil, commodity and manufactured goods shipped across the oceans. Does he actually think that as we reduce our presence on the oceans, that China is capable of filling that role? Give me a break. Free trade or trade with a gun to your head? Or is his overall thesis that countries dont care about the communist government, their theft, their abuse of their own people, the anti human system that is in place? Values matter. Its not just about money. Countries that side with China will wake up to that reality eventually.

Raoul, Please don't interview these half-cocked folks about such complicated topics as geopolitics. You can get very good interviews with many people from the US Naval War College. Or try David P Goldman. Or are these people paying you to interview them so they can get promo for their fund? That's the only reason i can think of why you would interview them. I've never heard such trash about geopolitics as what i've seen on Realvision interviews or in the comments here. Please please stop producing this stuff.