Whitney Tilson’s email to investors sending greetings from Beijing and discussing the impact of tariffs on Lumber Liquidators; documentary on China’s incredible economic transformation; and travel tips.
1) Greetings from Beijing! I just arrived for a brief three-day visit for the Stansberry Spring Summit, which I’m speaking at on Wednesday.
[activistinginvesting]Q1 hedge fund letters, conference, scoops etc
While I’ve been to Hong Kong, Shanghai, Guilin, and Tengchong on a handful of trips to China, I’ve never been to the capital. I’m very much looking forward to seeing the Great Wall and Tiananmen Square and exploring the city a bit tomorrow before the conference starts. I’ll send some pictures later.
2) The topic on everyone’s minds here is, of course, the trade war. While only Russian President Vladimir Putin is cheering needless trade conflicts between us and our closest allies like Canada, Mexico, South Korea, and Europe, President Trump has broad, bipartisan support to stand up to China and force it to finally start playing by the rules.
It’ll be interesting to see how long it takes Chinese President Xi to see American resolve and cut a deal. Here’s the WSJ with one of the best articles I’ve read on the situation: Broad Support for Trump’s China Fight Faces Test as Tariffs Escalate. Excerpt:
President Trump has enjoyed rare bipartisan cheering for his brass-knuckle trade fight with China, but that support will now be tested as U.S. businesses and consumers shoulder higher tariffs on Chinese imports.
The yearlong conflict has barely dented the U.S. economy so far…
For the left-wing perspective on this, here’s Paul Krugman‘s recent op-ed in the NYT: Killing the Pax Americana.
3) I’ve been getting some questions about how the jump in tariffs might affect Lumber Liquidators (LL), which I recommended in the first issue of the Empire Investment Report last month. It’s complicated… In the short run, it will crimp margins, though not as much as you might think. And in the long run, it may actually benefit the company (and the stock).
I’ll be sharing my full analysis with my subscribers in the second monthly issue, which will be out on Wednesday.
4) My friend at Stansberry Research, Dr. Steve Sjuggerud, has produced a new feature-length documentary, New Money, about the incredible economic transformation that’s occurring in China. I was at the premiere recently and enjoyed it. Here’s what Porter Stansberry told me about it in a private e-mail…
I know, a friend in need is a… “pest.” But I’d really appreciate your help. It will only take 2 minutes of your time. And I know you’ll learn something.
We’ve recently tried something very different at my financial research firm… Rather than writing a book or a series of reports about a good new investment opportunity, we produced a film. And not like a home movie either.
We hired a full production team and spent about a million dollars to produce a feature-length documentary.
We traveled to China, filming the incredible economic transformation that’s occurring there and showing Americans, for the first time, what life is really like in China’s booming, tech-centric cities.
You will be amazed by what you see.
I promise, China is nothing like what you’ve seen in the media here in the U.S. You’ve got to see it to understand – so we’ve spent a lot of time and money to “take you there” with our movie. I realize you may not have time to watch right now, but I hope I can at least “plague” you into watching our movie’s short trailer.
If you like it, please do me a huge favor – share this with your social media friends, e-mail lists, etc.
We’re selling access to this film for only $5, so we don’t have much of a marketing budget. And as you’ll see, this isn’t a “teaser” film. All of our best ideas are right there, in the movie.
There’s nothing else to buy – no other special report, subscription, etc. It’s just a great documentary that every investor should see. And anyone who is interested in the global economy, too.
Here’s a link to the movie’s trailer. And you can click here to watch the full documentary.
5) The nearly 14-hour flight here reminds me of a travel tip I’ve been meaning to share: this flight was the third time in the last seven months in which I’ve won a bid to upgrade to flat-bed business class on long international flights. (The two previous occasions were an Air China flight to New York from Hong Kong last October, and in December when my family and I were flying on the new Kenya Airways nonstop flight between JFK to Nairobi to visit my parents and sister for the holidays.)
In each case, I received an e-mail from the airline that took me to its website, where I could bid anywhere between $600 and $2,500 to upgrade my one-way ticket to flat-bed business class. I bid $1,100 and $1,305 for the two Air China upgrades (last October and yesterday) and won both.
For the Kenya Airways flights, I bid $1,100 for my wife’s and my tickets and $900 for each of my three daughters’ tickets – 10 tickets in total, round-trip – and won four of them. (I gave my wife the one business class seat on the outbound flight… We took two on the way back and let the girls share the third. It was funny seeing them split the 14 hours three ways, down to the minute!)
I’ve never seen this offer from first-tier airlines like Cathay Pacific or British Airways, but it can significantly upgrade your experience on a second-tier carrier – and save you a lot of money.
Best regards,
Whitney
