Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Investmenting - Watch What the Chinese Are Buying!

Companies / Investing Sep 04, 2007 - 09:30 AM GMT

By: Money_and_Markets

Companies Best Financial Markets Analysis Article

Tony Sagami writes: Do you remember the gasps when the Japanese were snapping up some of America's most-loved landmark properties during the 1980s?

Back then, the business news almost always included a segment about the Japanese buying an American icon, whether it was Pebble Beach, Columbia Pictures, or the Rockefeller Center.

And if the news wasn't about the Japanese buying something, it was about them building factories in places like Smyrna, Tennessee (Nissan).

Heck, whole movies were made about the phenomena. Remember Michael Keaton in the 1986 movie Gung Ho ?

When this was happening, I was working at Merrill Lynch. And I remember teasing my co-workers that they had better be nice to me because one of my Japanese uncles might soon become their new boss.

The Japanese buying spree was a function of the country's great prosperity. Throughout the 1970s, Japan consistently had the second-largest GDP and one of the highest per-capita incomes in the world.

These days, the Japanese are no longer the heavy hitters they used to be. However …

The Chinese Are Picking Up Where the Japanese Left Off

State-run China National Offshore Oil Company (CNOOC) tried a hostile takeover of Unocal in 2005. CNOOC eventually abandoned its $18.5 billion bid for Unocal, but that was just the first salvo …

The Lenovo-IBM deal is just one of many Chinese buyouts in recent memory.

How about Lenovo's purchase of IBM's personal-computer division for $1.75 billion?

How about Haier's attempt to buy Maytag for $1.3 billion?

How about the Chinese government's $3-billion investment in the Blackstone Group?

China isn't restricting itself to just the U.S., either. Chinese companies bought 40% of the Northern Light oil sands project in Canada … 10% of an Azerbaijan oil field and pipeline … and invested billions in Venezuela to get some of the crude oil that was previously going to the U.S.

The Chinese aren't just buying businesses — they're buying skyscrapers, shopping malls, farms, forests, ski resorts, vineyards, refineries, and mineral deposits.

And they are just getting warmed up!

Another Two Significant Marriages Were Announced Just Last Week!

Taiwanese personal computer giant Acer is buying Gateway Computer for $710 million. Treated as a combined company, they would have had $15 billion in sales and sold 25 million PCs last year. The Gateway purchase will dramatically increase Acer's U.S market share to 10.8%.

Hewlett-Packard and Dell, which control about 52% of the U.S. PC market, better watch out. Between Acer and Lenovo, I foresee nothing but shrinking profit margins for the two American giants down the road.

Separately, a Chinese company announced its interest in buying Seagate Technology, one of the only two computer disk drive makers in the U.S.

IBM sold its disk drive business to Hitachi in 2002, and Fujitsu and Toshiba are the other major players. So a Seagate takeover would definitely put Asia at the top of the PC food chain.

However, the Current Chinese Buying Binge Is Very Different from the Japanese Spree

I see at least three important differences this time around:

First, the Japanese companies doing all the buying were privately owned; many of the Chinese buying are state-owned and state-run.

Second, Japan is a democracy; China is not.

Third, and most importantly, Japan was not buying strategic resources like oil and natural gas; China is.

China will need plenty of natural resources to fuel its construction boom.

This has huge implications for investors smart enough to put that knowledge into action. So, how can you use this to make money?

Well, you could dig out your Ouija board and try to come up with a takeover list, but I think that's an impossible game to play.

On the other hand, I am confident that the Chinese will continue buying access to the raw materials they need to fuel and support their rapidly expanding economy.

I'm talking about:

Energy, such as oil, natural gas, and coal

Metals, like aluminum, copper, and steel

Foods, including pork, poultry, and agricultural products

Construction materials, such as cement, timber, heavy equipment

So, it won't take much homework to come up with a list of companies that are probably sitting on resources that the Chinese want. One of my friends, Larry Edelson, has nailed this trend in his Real Wealth Report .

Of course, if you're more of a mutual fund or exchange traded fund investor, you could look at the iShares S&P GSSI Natural Resources Index Fund (IGE), Energy Select Sector SPDR Fund (XLE), or U.S. Global Investors Global Resources Fund (PSPFX).

Whatever you do, make sure you pay attention to what the Chinese want. Because right now, they're a major force to be reckoned with.

Best wishes,

By Tony Sagami

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .

Money and Markets Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in