Comments on Edward Janeck's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/edward-janeck/articles http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-211440 211440 Tue, 22 Jul 2008 10:07:21 -0400
The global economy is on the verge of recession and some countryies will face depression before the tide turns, 4 to 10 years from now.

Get real and keep your powder dry. There will be a time to buy FXI, but certainly not now IMO. When that time comes, I will be a buyer of FXI.

FXP is a better bet. I look for FXI to go to 60 and FXP to go to 200 by November, 2008.]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-211254 211254 Tue, 22 Jul 2008 02:38:05 -0400 http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-211216 211216 Tue, 22 Jul 2008 00:32:24 -0400
A) buy MCHFX Matthews China Fund which is very well managed and gives you much broader exposure than FXI with plenty of upside.

B) buy RJI (commodities Index Fund)

These can be your core "china investment" which you can augment with individual stocks that are either in China or will benefit from china's assent.

There are many risks to investing in China that the author glances over or simply ommits, however, I agree with him that long-term (10+ years) offers a great risk/reward for investors. It takes time for people to wake up to "game changers" [similar to what Michael Porter refers to as "disruptive technologies" in his Competitive Strategy books]. China's assent is a global game changer in many ways and any serious long-term investor must consider making investments that benefit from this.

Discloser: Own MCHFX, RJI, FEED, MPEL (watching BIDU, CHL, CTRP, LFC)



]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-211201 211201 Mon, 21 Jul 2008 23:38:58 -0400 2) Japan is a post-industrial society and demographic nightmare with a falling population. China is a rural pre-industrial society that is a demographic dream with a growing population. Big difference.
3) Chinese oil companies? With their massive buildup of reserves they are buying Africa, next Canadian Oil Sands and then Latin American commodities companies. They are currently locking up supply; which is what the US thought they were doing 60 years ago with Saudi Arabia before a little thing called OPEC came along.
4) The future is in Asia, the writing is on the wall...if you don't believe it, go and see for yourself...
]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-211112 211112 Mon, 21 Jul 2008 19:33:33 -0400
There are several articles quoting Chinese oil company spokespeople about how government price controls are cutting into their profit margins. Profit margins, according to the quotes, range between -40% and -50%. Common sense (and a healthy dose of economic theory) dictates that if a company is losing 50% due to government price controls, it must be due to the government holding prices down 50%.

So, according to that, gasoline must retail for about ¥3.6 a liter ($1.99 a gallon), right? Wrong. It retails for about ¥6.6 ($3.66 a gallon). Even with a half-off coupon they pay almost as much as Americans do.

I see any of three events happening by June 2009:

1.) In an effort to keep the oil companies afloat, China will keep raising and raising fuel prices. Costs for industrial production will spike, resulting in a massive migration of factories to a cheaper market (probably Mexico). Economic growth grinds to a halt. Unemployment and inflation shoot up. People get angry.

2.) In an effort to keep the people happy, China will keep subsidizing fuel prices. Import tariffs go up. Growth remains high, though it will solely be due to money supply expansion. Investors move their money en masse to other countries looking for the “next big thing.” Hong Kong stocks plummet and Shanghai stocks soon follow. China goes from a net creditor to a net debtor. People’s savings disappear. It’s Japan Part II.

3.) In a balanced point of view to keep people happy and the oil companies in business, China outsources all or nearly all of their oil exploration projects to BP, Shell, and other dirty, dirty foreigners. Import tariffs remain high but are positioned somewhere between the tariffs in the eurozone and the United States. Chinese stocks with little international exposure drop, but a few make it to the top. Growth slows, but remains modest.

Jim Rogers called the bottom for Shanghai in late May, then called it again in late June, and will more than likely call the bottom yet again in late July. I’m almost reminded of the childhood tale of the boy who cried wolf.

Eventually, people won’t care if the wolf exists or not.]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210852 210852 Mon, 21 Jul 2008 14:47:29 -0400 http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210827 210827 Mon, 21 Jul 2008 14:20:40 -0400
Never try to buy at the bottom and sell at the top.

Buy on the uptrend and sell when the price starts to go vertical.

You will miss the bottom and the top, but will make money with far less risk.]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210783 210783 Mon, 21 Jul 2008 13:29:11 -0400
Believing we'll go back to 2005 prices is dreaming, with a country growing at 10-12% GDP.

Also, waiting for a clearer sign also means that by then, the market will have gone up and it'll seem too high then. It'll always keep looking too risky and too high, since this is an emerging market. You can make the same or even more pessimistic argument (about the country not being ready, social/political risks, etc) all the way back from when Shanghai index started.

Look at an emerging market as it is, with all it's risk and reward together. There is risk, but if you believe in the China growth story, then we're very close to a good entry point if you have a 10-15 year outlook.]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210765 210765 Mon, 21 Jul 2008 13:17:23 -0400 yes, it starts with ch...]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210743 210743 Mon, 21 Jul 2008 12:52:02 -0400 http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210709 210709 Mon, 21 Jul 2008 12:27:39 -0400
hm maybe - or maybe not. things might be a bit more complicated here than they look like on the surface. Apart from the fact that China is a heavily regulated economy with virtually no legal guarantees where your investment in any individual company can be wiped out by a stroke of the govt's pen, it is a socially very complex society. very divergent - between han mainland and the prospering coastal areas. maintaining a balance between the two is crucial to china and comes at a tremendous cost - something a GDP-comparison or any economic aggregate is unlikely to reflect.

Yes it may be a good time to buy - but the notion that a 54% drop represents 'value' is as as mistaken as can be. It#s a very common misperception by inexperienced traders/investors - and without wanting to insult, barely 5 years of investing experience makes you not more than a rookie. there are plenty of prtly hidden threats to that nice chinese growth story. and if i read that you allocate 25% of your portfolio to fxi - with another 25% when it drops further - i cannot but advise caution. as much as i like a concentrated portfolio, as much is this based on the premise that yopu must have a very very clear and thorough understanding of your investments. as for china - i think you barely have one. so investing 10% and another 10% after a drop might be more than sufficient. don't underestimate the huge risks involved! which brings me to my third observation: you are lengthy on opportunities and profts potential in your article - very short on risk. my suggestion is, try to find out as much about risks and what could go wrong as possible and write another article on that. it might not alter your position - but it will certainly strengthen your investment thesis - whatever that will look like afterwards]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210677 210677 Mon, 21 Jul 2008 12:01:35 -0400
China will be a player in the world economy for the next century but so was the US in 1929.

There are times to invest and times to wait. Now is the time to wait.

The US and the UK will drag down the world economies and with it will come China. Afterwards, China will lead the way out and that's when I will move in.]]> http://seekingalpha.com/article/85972-the-case-for-buying-china-now?source=feed#comment-210673 210673 Mon, 21 Jul 2008 11:58:23 -0400
The stampede of the 2007 is actually the worst time, yet ironically, everyone is screaming to buy china then.

Now it's a very good deal, yet everyone is ignoring China.

Go figure!

I think infrastructure play in China is the way to go. There's a lot of build out to go.]]>