Last month, Carrie Lam – the chief executive of Hong Kong – tried to speak to her legislature. But she couldn't get a word in...
"Hong Kong's Leader Driven out of Legislature by Raucous Pro-Democracy Lawmakers," was the headline at NPR.
Can you imagine the president of the United States not being able to speak in Congress because congressmen were literally shouting above the sound of his voice?
(I couldn't imagine it before 2016... but these days, anything is possible.)
Lam tried to continue her speech 20 minutes later. But she was shouted down again. So she did a televised address instead.
Lam said Hong Kong "is facing the most severe challenge" since it was handed back to China in 1997. She's right – but it’s creating a fantastic opportunity for investors…
Millions of people have marched in protests since they began months ago. It started with a bill that would have allowed some criminal suspects in Hong Kong to be extradited to the mainland.
That bill was finally withdrawn last month, but the protests for democracy have continued. And we have seen riots in the streets of normally placid Hong Kong.
It's bad in Hong Kong. And the media would have you believe there's no solving it... that the situation isn't just bad, it's intractably bad.
I recently spoke with our man in Asia, Brian Tycangco, to get his take. Brian does fantastic work on our True Wealth Opportunities: China letter. He recently visited Hong Kong with his family. He laid it out pretty simply on the phone...
The choice is between unending conflict or easing tensions. And right now, the media, and public sentiment, is leaning toward unending conflict.
I believe that China, and the people of Hong Kong, will choose easing tensions. It's the path that history most often chooses. The alternative, war of some sort, is simply not tenable.
So, China will give some minor concessions. And the people of Hong Kong will get on with their lives.
Does this mean that this will be the final conflict between Hong Kong and China?
The answer is clearly, no way. But don't let that confuse you.
We'll likely see more chaos in the short term. But in the medium term, easing tensions is the easiest path. Brian says he's seeing it already...
The protesters are getting more extreme, but fewer in numbers, he says. Meanwhile, Hong Kong is rolling out 10,000 low-income housing units and a stimulus package, which should help with any economic fallout from the unrest.
I expect that the situation will go from "bad" to "less bad." And as investors, that's exactly what you need.
When things are bad, we get opportunities to buy assets at big discounts. Then, the situation only needs to get a little bit better for prices to reverse.
"Bad to less bad" is where the biggest money is made in investing. And that's why these bad times in Hong Kong are setting up a crazy opportunity for us. You've just got to be gutsy enough to step up and buy.
P.S. What's happening in Hong Kong is only part of the story. There's a flood of money heading for Chinese stocks on November 27. We're talking tens of billions of dollars... And you have the opportunity to get your money there first. I recently put together a presentation outlining exactly what's going on. It goes offline at midnight tonight – so I urge you to check it out right here.
The signs say we should expect a trade deal with China soon... And C. Scott Garliss says it could lead to powerful gains. Read more here: Three Reasons a Trade Deal Is Closer Than Ever.
Brian has "boots on the ground" insight into the history of unrest in Hong Kong. He discussed the recent situation over the summer... and why investors shouldn't be spooked. Learn more here.
NEW HIGHS OF NOTE LAST WEEK
Apple (AAPL)… tech giant
Nvidia (NVDA)… tech giant
Qualcomm (QCOM)… semiconductors
Taiwan Semiconductor Manufacturing (TSM)… semiconductors
Advanced Micro Devices (AMD)… semiconductors
AT&T (T)… telecom
Sirius XM (SIRI)… satellite radio
JPMorgan Chase (JPM)… financial giant
Bank of America (BAC)… financial giant
Morgan Stanley (MS)… financial services
U.S. Bancorp (USB)… financial services
Western Union (WU)… money transfers
J.B. Hunt Transport Services (JBHT)… shipping
BorgWarner (BWA)… auto parts
LKQ (LKQ)… auto parts
Honeywell (HON)… manufacturing
Ingersoll Rand (IR)… manufacturing
Dover (DOV)… manufacturing
United Rentals (URI)… equipment rentals
Deere (DE)… heavy machinery
NEW LOWS OF NOTE LAST WEEK
Not many… It’s a bull market, you know!