This is tom nash and i'm here to offer a word of advice slash slash warning. We're going to do this live because i'm not about to this video. So i do think it's important so i was trolling today just looking at the stuff on the internet and i found this article chinese auto stocks this is on seeking alpha chinese auto stocks gain after beijing indicates more support for industry and if you actually read the article. It's basically another pump from china.

Which isn't the point of this video. I'm not about you know to bash. What they're doing here essentially. They're considering they're.

Studying you know studying extending tax exemptions. Blah. Blah. Blah.

Blah. Blah. Blah. And all of these.

Other companies. In china. Are basically rallying. So the reason i want to bring this up is because this is another you know it's a play from the usual playbook of the chinese government the ccp essentially to give you some good news to pump the stocks.

But that's not the point here the point. I want to make in this video is i want to answer a simple question for you right. And this is a good opportunity for us to talk about it i'm going to be on the air for five more minutes. And i'm going to get it out so there's going to be a brief video so in the next five minutes.

Let's ask a simple question. Let's use this opportunity. The chinese auto stocks are rallying. Because the chinese government is studying and considering giving them a little bit of benefit is this a good opportunity to invest in chinese other stocks because they've been beaten down.

Let's answer. This question by using data and objective information. No emotions okay let's start okay. So.

Number. One you should be aware that you're investing in a cayman islands entity not a chinese entity. A cayman islands entity. So the next time we're going to talk about how big the chinese company is and their performance.

No let's talk about the cayman island entity. The cayman islander is basically a vi a variable interest entity. That has absolutely nothing no income. No ip nothing no property whatsoever.

The only thing. It has is a contractual right to receive certain profits from the chinese company in which you are not investing now the last time i checked when you pay for contractual rights to receive something the same amount that you would pay to actually own that something that's called being an idiot. Just me saying that there's a huge difference between the evaluation of a contractual right and a property right especially when the counterparty to this goddamn contract. Excuse.

My french no offense to god of course. But especially when the counterparty to this agreement to this contractual. Right is somebody who has proven time and time again the ccp. The chinese communist party proven time and time again that they're not going to meet their obligations.

That are going to be arbitrary and they're going to do things basically that will be completely. Logical irrational just because they want it and there's absolutely nothing you can do about it. So i'm not in the business of signing contracts with counterparties that are not going to scam. Me are going to lie to me i'm going to do whatever the they want especially not if that somebody wants the same amount as if i'm actually buying the property.

So that's that's just number one. I'm just getting warmed up hold on a second there's more coming trust me. So what's behind door number. Two dimi dimi is kind of the russian jimmy character.

I have anyways. So what's behind door number. Two let's talk about it. So you should be aware that if you want to be a chinese company and you want to be listed in the new york stock.

Exchange or the nasdaq you have to abide. By us. Accounting principles it's called the. Us gaap us.

General accepted accounting principles now of course. The chinese companies are saying hey we're compliant. We're compliant. But you should know that they have yet to allow any sort of oversight from the us.

Accounting board to actually supervise the accounting principles of the chinese companies so the chinese companies all they have is basically their ward that they're compliant with us. Cap. But they're not letting the entity. That's supposed to oversight and supervise and does actually with every american company to look at their books.

So nobody has ever looked anybody outside of china never opened the books of the chinese companies and checked the validity of the accounting. The numbers are not validated the numbers are not supervised it's just chinese companies saying we're we're we're compliant. We're compliant. But can we check the books.

No no no you can't but we're compliant trust us. But you can't check the books now last time i checked if you accept that as a plausible. Explanation. And you still invest in this nonsense.

You're an idiot let's move on and i'm just using data. Objective data here no emotions. None of this i hate communists let's just use data right. But yes i do hate communists.

I mean it's kind of hard. But okay do you remember that china used to have the asian version of uber. Do you remember that remember when kramer went ahead and talked about it so china had a company called bd didi was the chinese uber. It's massive and then the chinese government decided to basically cancel it and unless they cancel cancel the company kill the company.

Why because they use the vie structure. Because they did the same thing that every other company. Alibaba neo. Name.

It every. Other company in china. Did the same thing use the va structure. But really for some reason that unbeknownst to us.

We still don't know got shellac for that and canceled. Why nobody knows because of a whim of some communist bureaucrat now that can happen to your investment. That's not just isolated to deity. They literally put the in prison.

Jack ma. Or jack paul whatever the his name now is they put in prison. The tennis player woman that complained that she was abused by a communist party member they're putting people in prison. Just because they're complaining and they did this to their ceo founder of their biggest company.

I mean how do you not think that this can happen to your investment. But hold on hold on let's continue how about this arbitrary. Lockdown. General zero tolerance policy.

Oh. They're shutting down. The whole country factories. People are starving throwing refrigerators off the porches just to protest just because they can there's no oversight.

There's no discussion. There's nothing do you think it cannot hurt your company and your investment now. My last point will be really interesting you should know that the chinese economy is a complete scam. It's built on a few things that are absolutely a scam.

I'm telling this straight up the real estate market in china. The property market is a complete pyramid scheme. There's nothing underneath it it's just a freaking scam not to mention the fact that their demographic is completely trash. They have so much aging population not enough young workers.

There's nobody immigrating into china and they're literally running out of people to work. Soon. You'll have so much old people getting carried by so many young people their real their demographics are in the brick of collapse not to mention the fact that they have an energy crisis. They don't have any energy independence not to mention a whole slew of things with their economy.

That's the problem not to mention the fact that their bffs now with putin. China and russia is now best friend and you want to invest in that country just talk about the risks not the morals here now what about the morals will you give up your morals for a quick buck. I wouldn't i mean who even knows if you even get your buck back in this conditions. You're basically dependent on the whim on a chinese communist official is this where you want to put your money.

I mean china and their economy and their stocks literally make bitcoin seem like a government bond as far as the risks involved. This is like 100 x. Times more risky than investing in bitcoin. And the same people who hate bitcoin preach about how incredibly insanely good.

The chinese talks are which is kind of mind boggling to me. But tom what about charlie munger. He believes in baba. Charlie munger.

Sold half half eddie of his baba stock. At 20 loss. Because you knew this is a crash company anyways. If you want to invest in china go right ahead.

Do whatever you want i'm out.