‘Mr. BRIC’ Jim O’Neill: ‘Apple is a Chinese stock, not a U.S. stock’

“China’s still the champ (so that means buy Apple) and Nigerian tech companies could be the next big thing. So says ‘Mr. BRIC’ Jim O’Neill, who tells MarketWatch he’s still keen on emerging markets, but is staying away from Russia for now,” Sara Sjolin reports for MarketWatch.

“The former chairman of Goldman Sachs Asset Management retired in April last year, but hasn’t given up actively investing,” Sjolin reports. “His latest bet was on a mobile-payment company in Nigeria, but he’s also up for shorting the euro and playing the Chinese consumer.”

MarketWatch: Where are some of the best investment opportunities right now?

O’Neill: I believe in investing in favor of China and the Chinese consumer. One of my big things is to be long the new China and short the old China.

MarketWatch: And how do you define the new China?

O’Neill: It’s related to the consumer. In some ways, the Shenzhen index is more representative of the new China than the Shanghai, so one way to play this is to be long Shenzhen and short Shanghai. Another way is through global consumer stocks. Look at Apple’s latest results — again the main reason why they blew the market away was simply because of their sales to China… The more I think about it, Apple is a Chinese stock, not a U.S. stock. It’s a stock that’s got U.S. technology, but basically its future depends on China. BMW is another company with strong sales to China.

MarketWatch: So you don’t see a hard landing there?

O’Neill: I think it’s ridiculous. China is clearly slowing, but most of the reason it’s slowing is because the policy makers deliberately want it to slow and get China readjusted. So, as I’ve said for the past two years, China is never going to land anytime soon. It’s not soft versus hard landing — it’s kind of a crazy idea. China is always going to keep traveling. And I think compared with the other BRICs, China is doing a great job. I worry about Brazil and Russia a bit, and this ongoing election in India is a really important thing.

Full article here.

11 Comments

  1. When media “analysts” and “experts” speak on things that I know extremely well, it never ceases to amaze me how wrong they are. This news site almost points out how terribly wrong technology pundits and technology stock analysts are on a daily basis.

    So I have to ask myself then, why am I often so willing to believe them when they speak on things I’m clueless about?

  2. I don’t believe any of the pundits or experts. Most of the time they have an agenda and that involves getting people to put more in the direction they suggest.
    Essentially the real “play” is “put your money where I tell you because we already have and we want the value to go up before we sell.”
    In the hockey analogy, the analysts are telling you to skate to where the puck is while they know where it is going to.

    1. I would modify that analogy to read:

      “In the hockey analogy, the analysts are telling you to skate to where the puck is while they are attempting to steer it to where they want it to go.”

  3. China will be the overextended Japan of the 1980’s once silicon wafers become obsolete and they have miles and miles of multi-billion dollar obsolete assembly lines.

    So one can be LT on China stocks for the next 3-10 years, but watch as Apple shifts the future clean graphene process supply chain around the world to 3 to 4 to 8 countries to cut down shipping and time to market.

  4. China is Apple’s workshop and their largest potential market. Other than that, it is just another country.

    Apple could shift production elsewhere if necessary and most of the high value added components in Macs and iOS devices are made outside the PRC.

    Does China figure heavily in Apple’s operations and plans? Yes.
    Is Apple a China play? Sort of.

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