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It’s a very clear weekend. How China is getting weirder and weirder. I find our biggest investment opportunity.

It’s a very “clear” weekend.

Everyone should get a booster shot. Everyone can get a booster shot, maybe.

The Evergrande mess in China will not affect the U.S, except it may.

The chinese have outlawed crypto. Five countries, including El Salvador and Ukraine, have made it legal. Crypto has fallen.

My friend Ed walked into Walgreens, got a Moderna booster shot. Walked out three minutes later feeling exctatic that (a) He got the shot, and (b) He could make me look a liar for telling not to go to CVS.

Suddenly there is an outbreak of health-compromised people who need/want (your choice) a booster shot. So, statistics now lie?  Suddenly. Surprise.

Fed Chair Powell is upbeat. Inflation is temporary. Unless you’re feeling it yourself.

Stocks explode. Up one day, then fall the next. It all very “clear.”

I feel confident long term. But short-term I look for big bumps.

With unemployment relief sliced, people now look for jobs, maybe. That should allow more restaurants to open, if they can find the food. and people still want to work in restaurants. A big maybe.

The chip in the booster shot can track us all. Where we go. What we do.

Over the weekend, dear friend David McNeill, banker, quipped, “Track me. They’ll be bored.”

China is  a hard place to do business, and getting harder

China is not a democracy. It has no rule of law.

The Chinese Communist Party (CCP) is the founding and sole governing political party of the People’s Republic of China (PRC). It took over on October 1, 1949 and has been in power ever since — all 72 years.

Xi Jinping became president on March 14, 2013 and has now become president for life. He’ll be around a long time. He’s only 68.

Of late, Xi has cracked down on business, corporations, crypto-currencies, corruption, screen time for kids (?), and bank lending. The objective is to distribute China’s awesome new wealth more broadly. Xi calls it “common prosperity.” Predictably, the results have been unpredictable. Xi is flailing around, looking for ways to keep his job.

It’s legal to make money in China, unless you make too much of it. Getting arrested for being too successful is not fun.

bMy fear is his roving eye on Taiwan.

If his domestic policies blow back, he may need to shore those politicies with a takeover of Taiwan, which was once part of China. (and may still be according to Xi.)  After Putin took over Crimea, his popularity skyrocketed. That lesson is not lost on Xi. I’m guessing the U.S. will back Taiwan.

The lesson for all of us continues to be twofold:

+ Stay away from Chinese stocks. I have been right on this one for months.

+ Stay away from American stocks with significant exposure to China.

The last few days have produced a cornucopia of articles  and books about China. They’re fascinating. Here are the better ones:

An Insider Details the ‘Black Box’ of Money and Power in China
A memoir by a well-connected businessman offers insights into the Communist Party’s thinking as it tightens its grip on the private sector.
Click here.

+ A new book looks behind Xi Jinping’s anti-corruption campaign
And shows that the princelings are still exempt
Click here.

The book is

To buy the book on Amazon, click here.

+ Corporations are facing added heat from Beijing
The seizure of the top two leaders of HNA Group comes as speculation swirls over whether Beijing will bail out another troubled giant, Evergrande.
Click here.

+ China Cracks Down Harder on Cryptocurrency With New Ban
The clampdown comes as China’s central bank has been testing its own digital currency. The price of Bitcoin dropped on the news.
Click here.

+Bail-outs and bedlam
Evergrande’s crisis highlights China’s shortcomings
Can “common prosperity” lead to financial stability in China?
Click here.
+  Top Investors split on direction of “tempestuous” China stockmarkets.
Bulls like Ray Dalio and Howard Marks spar with more downbeat managers such as Kyle Bass.
Dalio says Beijing is seeking the “common prosperity” set out in President Xi Jinping’s 14th five-year plan in March. It wants to correct a period when capitalism raised living standards but also created a “large wealth gap” and “too much debt”, he said.
The Financial Times. Click here.
+ Beijing seeks to ease fears on Wall Street after tech crackdown
China’s market watchdog holds call with global banks as regulatory assault sends shockwaves through stocks
The Financial Times. Click here.
In short, China is an unpredictable mess. I’m staying away.

The biggest opportunity for us investors

How customers deal with their vendors/suppliers/creditors is often a total mess — but a great opportunity to move from talking to people in call centers to completing the transaction via an intelligent app on your phone or your laptop.

Digitizing business is a huge ongoing investment opportunity — maybe the largest for all of us investors. I keep looking for these opportunities.

A company called Engagesmart (ESMT) just IPOed. A the beginning of the S1, I found these words from Bob Bennett, Founder and CEO. I was impressed.

This shouldn’t be that hard.”

I have come back to this phrase time and time again over my career as an entrepreneur and CEO.

Prior to founding EngageSmart, I spent several years growing an electronic payments company. While electronic payment technology was already available, it seemed more difficult to use than it should have been. We delivered some great innovations at that company to address this problem, delighting end-users and creating highly attractive returns for our shareholders along the way.

Similarly, it was my personal experience and frustration around paying a utility bill that sparked our journey at EngageSmart. The simple premise that going paperless and paying a bill online “shouldn’t be that hard” led my co-founders and me to launch InvoiceCloud, the predecessor to EngageSmart. I believed that technology and innovation could be employed once again to simplify and streamline the bill payment process.

Over the past twelve years, we found many other “this shouldn’t be that hard” opportunities, such as scheduling a therapy appointment, opting for paperless billing, managing an insurance claim, making a charitable donation, and paying a medical bill. These are common tasks that we believe should be easy to perform in today’s world, but they have not been digitized at the rate of other common consumer experiences. At EngageSmart, our mission is to simplify customer and client engagement to allow our customers to focus their time and energy on initiatives that improve their businesses and better serve their communities. By delivering innovative solutions that meet today’s needs, and are continuously enhanced to meet future demands, EngageSmart enjoys a very big market opportunity with significant tailwinds.

Commercial and non-profit organizations like the ones we serve lack the expertise and resources to create their own digital user experiences. They instead rely on manual processes, or third-party software designed for a different era, to manage their client interactions. EngageSmart solutions are true SaaS, meaning they are single instance, multi-tenant software products. So when a new feature, such as pay by text, is introduced, all customers immediately and simultaneously receive the enhancement. No downloads, no uploads, no patches. It is like having a vehicle in your driveway that is regularly upgraded while you sleep.

Engagesmart is growing fast and losing money.

I think they’re worth watching. Their first days of being a public company were rocky. I’m guessing the stock will settle down.

Why all the shortages?

Blame covid and wrong, frightened management decisions based on assumptions about how long it would last.

More in this New Yorker piece:

The Supply-Chain Mystery
Why, more than a year and a half into the pandemic, do strange shortages keep popping up in so many corners of American life?

For the New Yorker piece, click here.

Favorite cartoons

Ther blonde in the field

A pretty girl is standing next to a fence, watching a bull mate with a cow in the field.

The farmer comes up and leers at her, “Look at what that bull is doing to that cow. That is what I would like to be doing right now!”

She replies, “Why don’t you? It’s your cow.”

See you tomorrow, or so. — Harry Newton