We have T&T Capital Management have been saying for sometime now that companies that are dependent on China to propel their growth, particularly in the areas of real estate, and other hard assets, are at risk and likely don’t warrant a peak earnings multiple. China has gone on a spending spree that is unprecedented for hard assets bolstering growth for its own economy, in addition to companies supplying the materials, and technology being developed in the economy. As China slows down, these companies bottom lines are likely to follow suit. Obviously there are exceptions such as Apple (AAPL) which saw China as their primary growth engine in the last quarter, but for companies like United Technology, and Caterpillar, the changing market dynamics are already apparent.
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