Investor's Business Daily-100 China Edition? 7 comments
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Investor's Business Daily has its IBD-100 list that highlights the most attractive stocks from an earnings, growth, and relative strength perspective. When the market is rallying, the IBD-100 has historically outperformed, and when it corrects, these stocks usually underperform.
This weekend, however, we wondered whether we were reading an alternate edition of the newspaper. When looking through the top stocks in the IBD-100, seven of the top eight and ten of the top twenty were Chinese stocks listed in the US. We're all well aware of how China has recently been the leading force of economic growth, but given the strength in these names, one has to at least wonder how much of this growth has already been priced in.
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This article has 7 comments:
From a fundamental standpoint, something nasty is brewing in China. China is literally forcing banks to lend to stimulate growth. As we have seen in the U.S., this type of growth through borrowing is not sustainable...and it will lead to a huge pile of bad debt...
However, from a technical standpoint, the trend is too strong to fight
I just posted an article this morning that gives you a technical take on the Shanghai Composite:
consequencesunintended...
Buy High and Sell Low. If you didn't get into these at the start of the year, you already missed it.
Plus, to invest in China you have to have a mean speculative streak in your investment attitude. I think most investors with said streak were clobbered in 2008. But never underestimate investor stupidity especially where it concerns emerging markets. And especially never underestimate investor stupidity where it concerns investing in a communist country that routinely dispenses information that makes the U.S. Bureau of Labor Statistics look like a bastion of top notch research and unrefuteable information.
If you base investment decisions on security analysis and sound economic principles, then you are surely out of luck when it comes to Communist China. I am old enough to remember that every time you heard about this country on the news during the '60s and '70s, it was always 'Communist China' said this today and "Communist China" did that. In case you new investors have forgotten, they are still a communist country and believe it or not, they don't really like America all that much. We are still in a state of defacto war with Communist China and if that confuses you, google the 38th Parallel, North Korean cessation of combat, and then find out who to this day, still supports N.K. with arms and protection in the U.N.
A state run Communist Stock Market, masquerading as a capital free market system is ridiculous. Almost as ridiculous as the mindset of those that see gold in them there hills.
Bottom line, if you can't quantify the risk, get the hell out of the communist kitchen. Stick with what little you know and try to avoid the stupidity of the '07-'08 bubble investors.
TIC :)