No. of Recommendations: 0
"" How should investors mitigate the risk of a Taiwan-oriented crisis?
Make sure you aren't overweight China and are overweight defense [military] stocks, and think about which stocks could benefit from such an event. It's hard to insulate a portfolio from a full-on conflict, but you mitigate some of the risk.
For example, you could expect serious sanctions [in a crisis], and there is likely to be a shift away from Chinese supply chains. BYD [1211.Hong Kong] is the largest electric-vehicle vendor in the world in terms of number of units shipped. Electric vehicles, batteries, panels, and semiconductors are important for developed markets for the next five years. China is on the verge of becoming the Saudi Arabia of EV batteries. Are the U.S. and Europe going to allow that to happen? The Inflation Reduction Act says no. You want alternatives to China suppliers.
Are batteries the new chips in a U.S.-China Cold War?""
No. of Recommendations: 0
"" If you look at the valuations of China's Contemporary Amperex Technology [300750.China] and BYD, it's as if China has won the battle and cornered the market. Warren Buffett's Berkshire Hathaway [BRK.A] has started to sell some of its BYD shares. That seems like a smart move because there could be a scenario in which the U.S. and Europe say they're not going to allow China to dominate.
There is tremendous growth in EVs in China, but you also want a foot in the camp of emerging alternatives that are going to try to take share. You can see a geopolitical scenario where the U.S. says [companies] have to buy batteries from somewhere else.
Thanks, Simon.""
