China goes "all in" on Australian Wine, page-5

Holders can’t say they didn’t have a chance to get out as this has been dragging on for a while. I saw the potential upside if the trade spat resolved here, but was reluctant to buy into TWE in the midst of all this because you just can’t predict, control or value all the possible outcomes. The upside didn’t justify the downside risk here.

glad I steered clear as the 5-year length of the announcement and massive size of the tariffs will destroy market share and margins in China and lead to some nasty analyst DCF based downgrades.

unfortunately shifting volumes to other markets will inevitably require discounting and thus affect margins outside of china, and/ or stock write downs/ asset impairments.

I do hold tgr and bhp as well as lithium and gas plays, and recently got slaughtered by my fnp holdings without a chance to exit (in trading halt for 9mo) so I hope this doesn’t spill over to other agri/ mining sectors, but I have reduced those positions when sp’s were strong.

but I agree with the above holder that our moral obligation to stand up for human rights and our own interests in supporting the SEAsia alliance against Chinese territorial aggression should trump our own shareholder interests.

hence although I’m overweight China shares, I’m underweight asx companies with large China exposure, purely because although the market opportunity is large, it is a market in which there are too many risks such as govt interference/ tariffs/ regulations etc that make the risk far higher than entering other large transparent and free markets such as USA / europe.

I wonder whether the shift to ESG investing will start to include avoidance of China exposed companies due to their appalling human rights track record, aggressive geopolitics, internal corruption and govt interference in markets.

by the way, I’m not short and never will be, just giving my objective 2 cents as an outsider.