"Penang-born 'Goldfinger' believes US and China may cooperate out of necessity" (https://www.theedgemarkets.com/article/penangborn-goldfinger-believes-us-and-china-may-cooperate-out-necessity) reported Penang-born value investor Datuk Seri Cheah Cheng Hye:-
- "Many people don't seem to realise, despite the negative news headlines, today, the trading partner of the US is still China, not Canada or Mexico. The two countries are very much mutually dependent on each other. You can't really take away this bilateral relationship overnight. I am looking forward to a situation where they will get back together again," he added.
- "In the case of China, the news has been more positive than I had expected. In early April, I thought China could only look forward to a U-shape recovery. But now, it shows that I was too pessimistic, as China is heading towards a V-shape recovery,” he said.
- Meanwhile, Cheah warned that the current stock market in the US is in a high-risk territory, as its stock valuation is extremely high by any standard, which is a big mismatch against its poor economic performance.
- "You don't need to be a genius to figure that out actually. The price-earnings ratio of S&P 500 is about 23 to 24 times. But the US economy is doing very badly, its GDP (gross domestic product) is likely to be down by 6%-6.5% this year," he said.
- At some point, said Cheah, the financial engineering or bubble economy of the US, whose problems are pushed to the future in order to embark on a fiscal monetary stimulus, "will result in tears", and that made him pessimistic about the US stocks.
- "Value investors should be looking at China-related stocks and bonds, while they should be cautious about US equities. Don’t get me wrong, this is not a political statement, it is just a statement of factual observation," he advised.
China funds in Phillip Mutual's platform
