Making Money Minute with Ron Hiebert

Making Money Minute with Ron Hiebert - Tariff History Repeats Canadians are shocked at Trump's tariff threats - but it is not like this drama hasn't played out before. On March 17, 1866, Washington let the Reciprocity Treaty of 1854 lapse. This document allowed free trade between Canada and the US in most commodities. Its collapse came over concerns of potential annexation by the US, Britain's perceived support for the confederate south in the Civil War, and protectionist sentiment. Most of these reasons sound familiar today. That lapse in free trade, caused the Canadian economy to experience a severe recession. Let's hope things turn out different this time.

Making Money Minute with Ron Hiebert - Sports Betting Sports betting, whether through neighbourhood hockey pools, or legalized online gambling sites like Draft Kings, is growing exponentially. It is also diverting two of peoples most important assets - their time and money - into non productive activity. Households that bet on sports regularly, routinely see their savings rates drop by 14%. Researching favourite teams or players, can easily suck up precious hours a day. Just think how much further ahead people would be, if they devoted the same time, resources, and energy to investing

Making Money Minute with Ron Hiebert - The Bucket List A bucket list is a number of experiences or achievements a person wants to accomplish in their lifetime. During our adult years, it can be hard to find the time to do them because relationships, family, work and financial obligations often get in the way. For most, the ideal time to fulfill some of these dreams is in retirement. The drawback is often funding. That is why it is important to make a list of the things you want to do in retirement, and build those costs into your financial planning. By doing so, you will both have the time and the money, to turn those dreams into reality.

Making Money Minute with Ron Hiebert - 20 Punch Card Rule Warren Buffett has often spoken about the 20 punchcard rule as a cornerstone of his investment philosophy. Imagine you had a card numbered 1-20, and every time you made an investment, one of those numbers was punched. The card lasted a lifetime, so each of the twenty investments had to represent an extraordinary opportunity. This approach focuses investors time and energy on finding quality and long term value, over quantity and short term trading. The 20 punchcard rule is all about making your investment choices really count

Making Money Minute with Ron Hiebert - Make America Solvent Again MAGA stands for Make America Great Again, and is the rallying cry for all things Trump. But it is political theatre -a dream world. The US is a country that has 37 trillion in Federal Debt and another $100 trillion in unfunded liabilities like, Medicaid, Medicare and various pension plans. Their Federal government receives 5 trillion dollars in tax revenue each year, but overspends that number by 2 trillion dollars annually. In reality, America's revenue is puny compared to its debt and social obligations. Before America becomes great again, they need to first think about MASA - Make America Solvent Again.

Making Money Minute with Ron Hiebert - Investors Find Greener Pastures The Canada Pension Plan is our countries 800 pound financial gorilla. It manages over 700 billion dollars in retirement funds for Canadians. The places they invest our dollars, speaks volumes as to where they think the best money making opportunities lie. Four years ago, the CPP had 16% of its total funds invested in Canadian securities. Today, that number is down to 12%. Over the same time period, CPP has increased its exposure to both the US and Europe. Foreigners and domestic investors have also been moving money elsewhere. We are going to need more than just “elbows up”, to get them back.

Making Money Minute with Ron Hiebert - Saving Vs Earning People spend enormous amounts of time and effort doing investment research, hoping to improve their returns. The financial world is so crowded with investors trying to do the same thing, that beating the markets, is now almost impossible to do. Because of this performance focus, people often miss the low hanging fruit - the easy ways to increase returns. Maximizing any strategy that will lower taxes is one. The other, is focusing on products that reduce management fees. Both help increase returns, because saving a buck, is far easier than earning one.

Making Money Minute with Ron Hiebert - Broadening The Tax Base Our progressive tax rates are currently structured, so that the top 20% of Canadian income earners, pay 57% of total taxes collected in Canada. The bottom 20% of Canadian income earners, pay 2% of total taxes. The idea that high income earners manage to find loopholes, and get away with not paying their fair share just doesn't mesh with reality. Shouldn't we figure out how to get the bottom 20% the skills they need to get good paying jobs, so they could contribute as well. The solution is to broaden the tax base not shrink it.

Making Money Minute with Ron Hiebert - Synthetic Biology We marvel at the incredible breakthroughs in computing power and artificial intelligence that seem to be getting all the press lately. What has been ignored, are the advances being made in synthetic biology. Scientists at a company called Cortical Labs have recently grown a crude sort of biological brain in a vat. They taught it to play an arcade game that came out in the 70's called Pong. Elon Musk's company, NeuralLink, is developing technology that will directly interface our brains with computers. Both society and investors are facing a brave new world.

Making Money Minute with Ron Hiebert - Capitalism The Good & The Bad Over the past decade it has become fashionable to bash capitalism and private business as the consummate evil. Often ignored, are the exponential improvements to the human condition that man's drive to increase profits has produced. At the beginning of the 1800's, just about everyone lived in extreme poverty. Today, that number globally sits at around 9%. In the last two hundred years, economic output is up 300 times and even including massive population increases, is up 13 times per person. Capitalism has its flaws, but has also achieved amazing triumphs.

Making Money Minute with Ron Hiebert - Growth Stocks - The Ups & Downs The top 20 US growth stocks had blistering performance over the last 40 years, earning an annual return of 19.3% a year. This handily beat the S&P 500's 11.8% per year. However, big returns were accompanied with big volatility. These 20 stocks went through rough patchs during their 4 decade history, that drove their share price down by 72% on average, and took 4.8 years to recover. Growth stocks put up great numbers, but to play in this arena, investors will only benefit from the ups, if they can stomach their wild downside as well.

Making Money Minute with Ron Hiebert - Oilsand Productivity Gains For most of their existence, companies that processed crude from oilsand deposits, had some of, if not the highest production costs among global competitors. Now, due to cutting edge use of robotics, artificial intelligence, self driving vehicles, and dramatically reduced shut downs for maintenance, that has changed. Oilsand producers have driven their breakeven costs down to the low 40 dollars US per barrel. American shale producers have costs in the low $60's, giving us a $20 per barrel price advantage. For more information, listen to our Making Money podcast, hosted by Ron Hiebert and Gord Whitehead at letsmakemoney.ca or CFCW.com.

Making Money Minute with Ron Hiebert - Robots & Reshoring People don't believe that the reshoring of manufacturing back to the US will work, because labor costs are too high, making products here uncompetitive in price. And that is true. But what about if labour is replaced by machines? Artificial intelligence and robots have made incredible advances in the last few years. Machines don't need breaks. Don't need overtime, paid vacations or sick leave. They work 24 hours a day - seven days a week. AI can make manufacturing competitive again, but factories will be much different than they are today.

Making Money Minute with Ron Hiebert - Mag 7 Performance Stock market returns have been overwhelmingly influenced by a small number of companies. Over the past decade, the S&P 500's performance has been driven almost entirely by the “Magnificent 7”: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. During this 10 year period, the MAG 7 group of tech stocks has had an annual average compound return of 47%. If you didn't own this group, your performance was left in the dust. The average return of the remaining shares in the S&P 500 was just 7% per year.

Making Money Minute with Ron Hiebert - Trump's Unpredictability People think that Trump's repeated u turns on tariffs, deadlines, peace initiatives and trade strategies is a symptom of a deranged mind. They might be right. Or it could be that Trump is using unpredictability as a strategy. Keeping people off balance and not knowing how to respond, often gives him an advantage when negotiating. I have seen this approach used many times in big real estate transactions. It usually doesn't win any friends or earn much respect, but it can be very effective in helping get what you want out of a deal.

Making Money Minute with Ron Hiebert - Financial EQ Versus IQ A prevailing myth is that the greater a persons IQ, the better they will do financially. Research shows that EQ, or emotional maturity, is much more important to wealth creation than IQ. We all know lots of people who are pretty average intellectually but have done amazingly well financially. IQ isn't something we can do much to improve. EQ is the opposite. The better we get at controlling the destructive effects of greed and fear, the better we will do as investors. This means there is hope, for most of us to improve our wealth building skills.

Making Money Minute with Ron Hiebert - A Tempest In A Teapot Canadian's don't like being bullied and are upset by Trump's overtures to make Canada the 51st state. These emotions have spilled over into the news cycle and have blown Trump's tariff threats way out of proportion to their economic impact. Our central bank says 100% of energy exports and 95% of other exports are free trade compliant. The Royal Bank estimated that almost 90% of Canadian exports appear to have accessed the U.S. market, duty free in April. Trump is getting exactly what he wants out of these threats - a fear - that is many times greater than their actual impact.

Making Money Minute with Ron Hiebert - Voters To Blame America's equivalent to our Canada Pension plan is in a sorry state. Most estimates have it running out of money in 10 years or less. If that happens, the average US pensioner will see a cut in their benefits by over 20%. Citizens blame government leaders for not having the courage to do anything about it. But the real problem is the voter. Any political candidate who wants to raise taxes, decrease retirement benefits, or raise the age to start receiving those benefits would be wiped out in the next election. The tragedy, is that our leaders will never be any better than the people who elect them.

Making Money Minute with Ron Hiebert - Dining Out Most of you remember a time when dining out in a restaurant was a big deal. Like most things, times and preferences have changed. Today, nearly 75% of all restaurant traffic happens off premise - meaning that almost 3 out of every 4 restaurant orders are taken to go. As usual Millennials and Gen Z are driving the trend with 6 out of 10 of them using take out at least once a week. If you own restaurant stocks, it is important that those companies are keeping up with intergenerational dining trends. If they aren't, they will be left in the dust.

Making Money Minute with Ron Hiebert - Buy The Haystack In some sectors it is hard for even professionals to spot companies early in their corporate lives that will become huge winners - think Microsoft, Apple or Amazon. John Bogle, an early pioneer in ETF's and low fee mutual funds, had some great advice. He said, “ instead of trying to find the needle in a haystack - just buy the entire haystack. In other words, own a basket of stocks rather than just one individual name. For growth or tech holdings, this can be as easy as, buying a Nasdaq Exchange Traded Fund. This Index has gone up 15 times in the last 16 years.

Making Money Minute with Ron Hiebert - Selling & Tax Sometimes people want to sell a stock because they are worried markets will drop significantly and their profits will disappear. But before hitting the sell button, it is worth taking some time to do a simple calculation first. If you are sitting on a big profit and think a pullback will be temporary, figure out how much the sale will cost you in taxes. If the tax to be paid, is larger than the amount you think the shares could fall in price, it might be more profitable just to hang on to them. It is not about what you make, but what you get to keep that matters.

Making Money Minute with Ron Hiebert - Making It & Keeping It Making money is hard. But keeping it is even harder. The Forbes 400 is an annual list of the wealthiest American's. Unfortunately getting on the list and staying there involve two entirely different skill sets. Roughly 20% of the names, drop off the list per decade for reasons other than death or family turnover. Extinction is a big factor. Forty percent of all companies that become publicly traded eventually lose all their value over time. Becoming wealthy is fraught with risks. Hanging on to it - seems to have just as many.

Making Money Minute with Ron Hiebert - Disruptors Get Disrupted Remember when Blockbuster Video burst onto the scene. They disrupted the movie industry with a simple premise. People loved the convenience of renting movies they could watch from home. At one point the company expanded to 25,000 stores. Then along came Netflix. It began to disrupt their business with even more convenient home streaming and no annoying late fees. Blockbuster wasn't paying attention to the competition and famously passed on the opportunity to buy Netflix for 50 million. Today there is only one Blockbuster store left in Bend Oregon. With technology - the disruptor - eventually becomes the disrupted.

Making Money Minute with Ron Hiebert - Chinese Vehicles Western auto manufacturers typically redesign their vehicles every 5 years and their trucks every 10. Meanwhile, Chinese developers have slashed vehicle development time by more than half - to as little as 18 months. This gives them a huge competitive advantage in both costs, and the newness and variety of vehicles they have in their showrooms. The gap can be explained by differences in testing. The Chinese substitute 100's of thousands of miles of on road testing with computer simulations. Real world testing still gives western vehicles a quality edge Chinese simulators can't match.

Making Money Minute with Ron Hiebert - Robots Are Coming If you want a sneak peek at what a workplace dominated by AI and Robotics will look like, your window into that future, is a typical Amazon fulfilment centre. Roughly 75% of Amazon deliveries are now assisted by robotic systems. The number of packages that Amazon ships per employee has soared from 175 in 2015 to 3,870 today. Amazon will soon have as many robots working at its packaging centres as it does people. The human headcount per centre has fallen by 30% in the last 5 years, and is expected to keep sliding as machines rapidly replace us. Welcome to the future!

Making Money Minute with Ron Hiebert - Electric Vehicle Repair Rates It is logical to assume that since electric vehicles have simpler power trains, they should require fewer repairs than those with internal combustion engines. According to J. D. Power, the real world experience is quite different. Owners of cutting edge, tech-filled battery electric and plug in hybrids are seeing problems that require a trip to the dealership at a rate three times higher than gas-powered vehicles. Buyers of electric vehicles need to be realistic. This is new technology. It requires time to work out the bugs.

Making Money Minute with Ron Hiebert - Canadian Crude & US Demand The problem with horizontal drilling in shale formations is the high rate of production decline these wells experience. This is tolerable when prices are high, but when they drop below $60 per barrel, which is the breakeven point for a lot of shale drillers, new production dries up. This is currently what is happening in the US. Fewer new wells coming on stream, means the US will import more oil to meet its needs. For Canada, which has oil sand producers with break even costs in the low $40's, and the infrastructure to get oil down south, this is great news.

Making Money Minute with Ron Hiebert - Thinking Two Dimensionally When investing in oil and gas stocks, we often think price increases are good and price declines are bad. But that is one dimensional thinking. When prices go up, of course energy stocks will rise. But when prices decline, a whole other category of businesses do well. Capturing those moves is two dimensional thinking. Winners in a declining energy price environment include, refiners, and intensive energy users like airlines, cement and fertilizer plants. Learning to think two dimensionally will help you spot opportunities in almost any market.

Making Money Minute with Ron Hiebert - ariffs & Markets Markets are trading at all time highs. Traders seem to be ignoring all the threats out there. Tariff's can lead to trade wars and if not managed properly bring on a nasty recession and bear market. There are two opinions as to why this is happening. The first is that we are in a bubble where greed and FOMO, the fear of missing out, are distorting normal rational behaviour. The second is that these traders actually believe tariff issues will get resolved and end up being a net positive for the economy. Considering the alternative - I hope they are right.

Making Money Minute with Ron Hiebert - Stocks & Inflation If you buy a 10 year, fixed rate bond, the investment will pay a steady return and at maturity you are promised to get your principle back. The hidden risk with fixed income, is inflation - which in Canada has averaged 2.65% over the last decade. It slowly gnaws away at your returns. One way to protect against inflation is by owning stocks. For example, the companies that make up the S&P 500 since 1988, have increased their dividend payouts by 6% per year. If you want to protect your income from the ravages of inflation, stocks should be in the mix.

Making Money Minute with Ron Hiebert - Disasters & Insurance If Trump hasn't scared you off buying a winter home in the US sunbelt - maybe this will. The natural disasters that took place the last few years have caused insurers to see a lot of red ink. Huge claim payouts forced them to dramatically jack up insurance rates. Take Florida for example, a favorite snowbird destination that has seen its fair share of hurricanes the last few years. The average cost to insure a home in the Sunshine State is expected to reach $15,460 US by the end of the year. So before you buy a property down South, check the cost of insurance. It might be a deal breaker.

Making Money Minute with Ron Hiebert - Solar Growth After decades of rosy predictions, solar usage is about to hit prime time. Estimates have solar power generation surpassing nuclear in 2026, wind in 2027, dams in 2028, gas in 2030, and coal in 2032. At its current growth rate, solar capacity is doubling about every three years—and by a factor of 10 over the next decade. By 2035, solar could be earth's biggest source of electric power. Far more solar panels are expected to be manufactured in the future than have been produced in the past, giving this trend a long growth runway

Making Money Minute with Ron Hiebert - Black Markets The world's shadow economy, or black market, includes everything from street vendors to illicit drug trade. It is that grey area of finance where government has no control, and does not tax. Globally, the black market is huge - generating an estimated 12.5 trillion dollars annually in revenue. In places like Brazil, India and China, the shadow economy is responsible for over 20% of the countries economic activity. In western countries like the US, UK, Germany and Japan, that number is between 5-7%. Black markets make economic forecasting difficult. It is hard to predict what you can't accurately measure.

Making Money Minute with Ron Hiebert - Copper One of the tried and true ways of convincing new investors to part with their money is to tell them what they are buying is going to be the next big thing. Take for example the metal copper. Since the dawn of Tesla, and their market transforming electric car, the experts have been saying there will be a huge shortage of this industrial metal and prices will sky rocket. However, the reality is that copper is trading at around the same price, it was at in 2011. Before buying the hype, check the reality.

Making Money Minute with Ron Hiebert - Hang On To The Winners At an annual general meeting in 2013 Warren Buffett gave his shareholders some insight into his stock picking process. He said that over his life, to that point, he had owned between 400 and 500 companies. Out of all those picks, the bulk of his profits came from just 10 of them. His partner Charlie Munger added, that without those 10, their returns would have been pretty average. The key to building wealth is not in in how fast you can get in and out of the market. The key is hanging on to your winners long enough so they add meaningful gains.

Making Money Minute with Ron Hiebert - Lotteries Lotteries are big business. Americans for example, spend more on them, than movies, video games, music, sporting events and books combined. Unfortunately, the people who buy tickets are financially struggling and that is probably why lotteries are often referred to as a tax on the poor. The lowest income households spend $412 per year on tickets. It is sad, because this the same group that struggles to find a couple hundred dollars to cover an emergency expense. Their lottery spend,is four times as much as households in the highest income bracket.

Making Money Minute with Ron Hiebert - Growth is More Than Tech Investors are under the false impression that if they are looking for growth companies, the tech sector is really the only game in town. Certainly tech stocks have done well, but so have a lot of other sectors. If you look at the top ten performing stocks in Canada over the last 20 years, it is quite a diversified list of two gold stocks, 2 manufacturing firms, 1 construction company, 1 real estate investment trust, one consulting firm, one pharmaceutical company, one auto service and one tech name. If you are hunting for growth, it is worth broadening your horizons.

Making Money Minute with Ron Hiebert - Nvidia Nvidia, is a maker of high end computer chips, especially used in Artificial Intelligence applications. It has become the world's most valuable company, recently cracking 4 trillion dollars in market value. The rise has been relentless. Nvidia achieved a trillion dollar market value in June 2023, and then tripled it a year later. Put in perspective, Nvidia is worth more than the combined value of the Canadian and Mexican stock markets, and it exceeds the total value of all publicly listed companies in Britain. Nvidia and stocks like it, are a reminder why investors want some exposure to tech in their portfolios.

Making Money Minute with Ron Hiebert - What Tariffs Really Are Politicians describe tariffs in warm fuzzy terms - how it will rebalance trade, cause domestic businesses to reshore, and motivate foreigners to build domestically to get around the extra costs. What is never talked about, is the damage they cause our wallets. What tariffs really are, is a sales tax that goes into government coffers and comes out of our pockets. The main victim is the consumer, though some of the costs can be absorbed by foreign manufacturers and domestic sellers. The notion that tariffs are a painless economic fix - is simply nonsense.

Making Money Minute with Ron Hiebert - Boring Is Beautiful Recently a European official was quoted as saying, “If you want a sane, stable, even boring, rules-based order and predictable business environment, Europe is the place for you.” Investors, tired of the chaos US markets have been experiencing lately under Trump's ever changing tariffs, have been listening. Money has been moving across the pond and has caused European stock markets to significantly outperform those in the US. So in spite of Europe's slow growth and Byzantine regulations, investors are finding that boring can be beautiful.

Making Money Minute with Ron Hiebert - Death By Regulation The size of Canada's manufacturing sector has just been overtaken by Ireland. This is pathetic beyond words. Ireland is a country with one eighth our population. The reason we are viewed as an unattractive place to invest is regulation. We are drowning in it. Rules have increased by 42% since 2005 and now total 105,000. The atrophy of our industrial base is a case study on everything you don't want to do. Our failure puts us at the bottom of the industrialized world. They should call it, strangulation by regulation.

Making Money Minute with Ron Hiebert - Money & Happiness Does money make you happy? This is a question that has been debated for ages. According to the latest research the question has two answers. It seems that if you aren't happy to begin with, extra money does little or nothing to change your mood. However, if you are happy already, a positive change in finances will even make you happier. The extra cash simply allows you to do more of the things that you derive enjoyment from. If you aren't happy to begin with, all the money in the world isn't going to change things.

Making Money Minute with Ron Hiebert - How Alberta Ranks Canada's wealthiest province is Alberta. If you compare us economically to the 50 states in the US, we would rank 16th, just behind Minnesota. Saskatchewan which has the second highest GDP per capita ranks 21st. On the other end of the scale, are the three maritime provinces. They rank behind Mississippi, which is the poorest state in the US. Not surprising, it is the Canadian provinces with the highest energy resource wealth that top the list. Governments need to remember that - before trying to kill the golden goose.

Making Money Minute with Ron Hiebert - Tax Freedom Day For the average Canadian, tax freedom day is June 8th this year - one day earlier than 2024. If Canadians paid all their taxes up front, they would work the first 158 days of this year before bringing any money home for their families. This number represents all Federal, Provincial and Municipal Taxes and indirect fees like GST, PST, health and sin taxes. These costs total up to 43.1% of the average Canadian families income. The sobering thing, is that if Canadian's paid enough taxes to meet all of this years Government spending, and balance the budget, tax Freedom Day wouldn't arrive till June 21st.

Making Money Minute with Ron Hiebert - First Time Homebuyers A recent CMHC Mortgage Survey, uncovered some interesting trends among first time home buyers. 64% of them, rented prior to buying their first home, while 35%, formerly lived with friends or family. Those that rented, did so for 6.3 years before purchasing a home. On average, first timers had to save 3.4 years for their down payment. 35% of newbie home buyers, were helped with their downpayment by a gift or inheritance - the average size of which was whopping $79,127. Interestingly, half of these first-timers, shared the purchase of their home, with someone other than their partner or spouse (54%).

Making Money Minute with Ron Hiebert - Argentina As A Role Model The headlines are dominated by stories of countries like the US and Japan sinking into a quicksand of unsustainable debt. The US, recently, had the last of the three major credit rating agencies, pull their triple AAA rating. But, in spite of the gloom, there are some encouraging trends. Greece, has reclaimed its investment-grade credit rating, and recorded a budget surplus last year. Argentina, which was another perennial basket case, has dramatically cleaned up its act and also recorded a budget surplus. C'mon guys. If Argentina and Greece can get their economic act together - so can we.

Making Money Minute with Ron Hiebert - Money Printing & Markets People are scratching their heads over the reaction stock markets are having to recent political events. Equities continue to rise, in spite of - trade battles, rising deficits, a 3 year war between Russia and Ukraine, and the bombing of Iran by America. The destabilization of the global economy is simply shrugged off. This weird reaction, is because the world is drowning in cash. Governments are printing currency at a frenzied pace. This money needs to be invested no matter what the political environment or market valuation…as it just keeps piling up

Making Money Minute with Ron Hiebert - A Life Plan People get pushed out of the workforce before they are ready, often based on cost cutting decisions by the companies they are working for. If an employee is unprepared, or unable to find a similar level of work, the unexpected change can lead to feelings of boredom, regret and loneliness. Therefore it is important, to not only have a financial plan for retirement, but a life plan as well. The second plan, is a thought out course of action, that will give your retirement life purpose, meaning and fulfillment. These are plans best made, before, and not after you leave the workforce

Making Money Minute with Ron Hiebert - The Triple AAA Club A triple A credit rating is the best you can get. For investors needing sterling quality in their bond portfolios, this is where you want to look. Due to the drunken spending spree most countries have been on, that list has shrunk dramatically over the years. It is down by a 1/3rd since the financial crisis of 2007 and currently has only 10 members. The nations that still have a triple AAA rating from all three major rating agencies include: Australia, Denmark, Germany, Singapore, Norway, Sweden, Switzerland, Liechtenstein, Luxembourg and the Netherlands. The list of countries that don't make the cut is long - and growing.

Making Money Minute with Ron Hiebert - Gasoline Is Cheaper In The US If you are adventurous enough to head south of the border for a driving vacation this summer, the Canadian dollar won't buy much. However the one area you can actually save some money, is fuel. It is amazing how much cheaper gasoline is below the 49th. Even including the currency differences and the differential in litres verses gallons, our costs on average are at least 20% higher. The vast majority of this price spread, consists of higher Canadian provincial and federal taxes.

Making Money Minute with Ron Hiebert - China & Profits The massive shift in manufacturing to China wasn't a globalist conspiracy. Manufacturing moves where it can economically survive, and the problem, is the high cost of western goods, have priced many of them out of the market. There is an old saying, “When the Chinese walk into a room, profits walk out.” Even low cost manufacturers in China, due to razor thin margins, find it hard to compete profitably with one another. China's stock markets, are trading at the same levels they were at two decades ago, signalling little, if any, profit growth. If Chinese companies enter a sector you are invested in, beware, of the great profit vanishing act.