It’s not the earnings that matter as much as the reaction to them that counts. Big misreads by the market do happen sometimes and that leads to massive and sudden moves. But more often then not, stock prices and their trends tend to reflect future earnings on the aggregate. What they are showing, for Macau at least, is that a temporary bottom is in. I still do not believe it is the final bottom, but there may be some time to buy and hold your favorite Macau stocks with fingers on the sell button, ready to run. Personally, if you have any gains I suggest not getting too greedy and locking them in now, if only because Beijing is unpredictable and you don’t want to be holding the bag right when Xi announces more “helpful measures”.

Las Vegas Sands

The only Macau stock in the model portfolio at this point is Las Vegas Sands at a 3% position that was taken on June 28 at $42.50. That’s a 20% gain in 6 weeks, and that’s more than enough. It might go higher, but selling when you’re happy is just as important as buying when you’re scared. That gives us a 0.6% gain overall for the model, not a bad gain for a very conservative move in just a few weeks. Those who want to hold until late September for the dividend payment are doing so at some risk, so unless you have a large holding I suggest foregoing the dividends. If it dips however between now and September 20th and you want to get back in for the dividend, it looks safe to buy hard dips at this point for a decent bounce and collect though. If not, just let it go and move on.

Mainly, the factor that is the most convincing that Macau is safe for the short term, meaning the next 2-3 months (not any longer than that without reassessment), is that the Chinese money supply just took a big jump higher, growing at about a 12% annual clip. This is quite high, so don’t be surprised if you hear news of labor disputes and strikes and protests in the People’s Republic soon. These are always signs of price inflation. Things like this could already be happening without the West even noticing, which might be behind Beijing’s move to silence independent internet journalism recently. The People’s Overlords don’t want complaints to get too loud.