If you ever tried or wanted to evaluate companies, one of the people who you likely used the work or heard about Aswath Damodaran. He teaches corporate finance and valuation at the Stern School of Business in NYC and has many You Tube videos about valuation. He is featured on many business shows and has been doing valuation for a number of years. A decade or two ago, his analysis would include: he would ask his students why did they pick the number for growth they did. The answer was China. The country was booming and picking a number had the possibilities of being correct. If you believe in cycles for economies, the growth rate for China is on the downside.

In an article from James Griffiths of Reuters, China expects its economy to grow at 4.5 to 5%, the lowest rate the government has set in decades. This the first time China’s leaders have set a target below 5% since 1991.

Premier Li said, particular attention to expanding the domestic economy. China must shift from its long-standing reliance on investment and exports toward a model primarily driven by innovation and consumption, adding that while manufacturing could be further upgraded, its share of the economy should fail.

China’s current insufficient consumption is deeply tied to a series of institutional and structural factors, making it unrealistic to fully resolve these issues in the short term.

Linking to dividend paying stocks, every company expects and projects growth rates, do you agree with them? do you expect things to be different? If your investments are expecting lower growth rates, then it is time to reflect on your holdings.

There are more questions than answers, till the next time – to raising questions.