List Categories | List All Articles | List Articles By Title
There has been great condemnation recently because China has been selling its goods on the world market at prices below what other countries, especially the U.S., can produce. It has been called exporting deflation.
The major reason for these extremely low prices has been their labor costs which I am told are about $100 per month for ordinary factory workers. Even factories in Mexico are being closed and shipped to China because of the labor differential. These extremes in production costs are literally putting many, many companies out of business. When you look at the labels in almost any store you will note the product is made in some Asian country. As far as you, the consumer, is concerned you are buying a product at a good value. Political considerations aside there is no question this has been beneficial to retail buyers.
Is there any reason China should act otherwise? No, they are acting like any businessman. Yes, I realize it is a country, but countries do the same as businesses just on a larger scale.
Suppose you and I each own a hamburger franchise. I have a McDonalds and you have a Berger King across the street. We each sell our hamburgers for 99 cents. The competition is equal. You also own a huge cattle ranch and slaughter house/packing plant as well as a large bakery and you want to increase your retail food business so you pass along the savings you make from the meat production and bakery to the burger stand. You reduce the price to 75 cents and now make a profit of 20 cents per burger whereas I only make 10 cents and must sell it for 99 cents. When someone wants a hamburger where do you think they will go?
I can scream all I want about how unfair this is, but so what. He is not selling at a loss and even if I lower my price I can't go low enough to make a profit. I eventually will lose all my customers to him and will go out of business. Is that fair? Sorry, but fair doesn't count. That's business.
China is selling hamburgers (whatever) cheap, but they are of equal quality. Consumers want both quality and price (value) and don't care where it comes from. Countries are complaining that they are selling "too cheap". No they are not because they are making a reasonable profit. One of their production tools (cheap labor) is so good that businesses from all over the world are moving there to take advantage of it. If they don't they will be out of business. You can't blame them.
Over the next 10 to 20 years China can become the world's leading country because of their economic development. They don't have the overhead (translation - central government, entitlement programs, lawyers, labor unions, etc.) we do so they will be able to keep costs down. Eventually (many years) their central government will slowly evolve toward giving more to their people, but it is going to be decades. In the meantime, learn to speak Chinese.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
The Secret Method to Selecting a Winning Trading System
Every successful trader has a winning system. There are of course, as many systems out there, as there are traders.
Boiler Room 7/17/00
On Friday or Saturday evening my wife gets a movie from Block Buster and after dinner we sit, hold hands and watch. This week she brought back one that I think every investor or anyone contemplating investing in the market should see.
Stock Investment Advice
Stock investment advice is easy to find. Do you get cold called by brokers with the latest investment tip? I have, as have countless others around the globe.
Long Term Investing
In his wonderful book, 'Multiple Streams of Income', best selling author Robert Allen advises Investors to divide their Stock Market investment and trading capital into three portions -50% invested long term (forever) in an Index Fund, 30% invested in Accelerated Stock strategies and 20% in options or high risk investment strategies.This article will discuss long term investing and how technical analysis can alert us to points in time when it is prudent to take profits and exit the Stock market.
How Much Information Do You Need?
You have decided to buy some stock or mutual funds, but wonder which one to buy. You need more information so you call your broker for advice.
Investment Research - The Dalbar Study
Very few people, even professionals, have heard of the Dalbar Study that originated in 1995. Its purpose is to determine the profitability of trading for the small investor of mutual funds.
Hold Em and Fold Em
When most analysts, financial planners, fund specialists and investors try to decide whether to buy a particular stock they immediately go to the financial statements to determine the growth potential of the company. Numbers and more numbers.
Selling Strategies - Setting a Stop Loss
Sometimes the best way of lowering exposure to risk is not to invest at all! However, when we make the decision to jump into the muddy waters of the stock market, its always a good idea to have a life jacket ready, just in case.We all have stories of that "must have" "can't lose" stock that looking back, we didn't really need to buy, and it definitely lost.
No Load Mutual Funds: Investment Hype vs. Investment Help
With the internet such a huge part of our daily lives, many investors have access to a wide range of instant investment information.Whether you're into stocks, bonds, mutual funds, futures or options, there are tons of electronic investment newsletters offering to turn your small stake into a giant fortune.
Frog In The Pot
You remember the story about the frog that was put into a pot of cold water on the stove. He was not concerned.
Long Term Financial Vehicles
Investing in long-term financial vehicles give you the most gains but it also puts your funds at greater risk. There is much truth to the saying, "there is no gain if there is no risk".
The Shadow knows. There used to be a radio program called The Shadow where the hero, Lamont Cranston, the Shadow, would overcome the shadowy forces of doom by clouding the vision of those around him.
Paddle Your Canoe
At some time in your life you have been on a river in a canoe and hopefully you had a paddle. You know about being up the creek without one.
Overseas Investing: Going Against the Mainstream
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This strategy works in the short term, but can lead to difficulty in the longer haul.
The Cub; II
We keep hearing about this bear market and that the bottom is "in" or "very close" so we should be invested in these bargain basement prices to take advantage of the next bull so we won't lose out on the expected huge profits.This is not a big bear market - yet.
Series 7 Exam
What is the Series 7 Exam? If you are looking to become a licensed Stockbroker, you need to know about the Series 7. The Series 7 is a 250 question exam that when passed, licenses you to act as a Registered Representative.
Cash Is A Position
I go to the Money Show every year to visit with friends who have booths and are speakers. Then when folks are filing out of lectures I listen to their comments on what I know the speaker has been saying.
Value Investing: Selecting From The Bargain Bin
Picking a beaten-down stock requires a different kind of selection process. Normally, most companies beaten down this far have no earnings to speak of.
When Should I Sell?
People are always asking me when should I sell my stock or mutual funds?There are some relatively easy answers to this. In fact, so simple that you won't believe them, but they are things I have learned over the past 30 years as a professional trader on the floor of the commodity exchange in Chicago.
Online Broker Trade History Not Doing the Job
Let me start by saying that..
home | site map
All articles are copyright to their owners.
Note: this website lists articles, We do not Write Articles !