Jake Berzon

China on Sale, Discounted Pharmaceuticals

I sold my remaining CHN shares on Monday, May 19, 2009 at $19.99, realizing a net 15% loss on this position, accounting for all distributions, but ignoring commissions. (Small change relative to all my realized China related gains over the previous three years.) While I still have China related positions in a portfolio that was previously managed by a financial adviser, this CHN sale completes my exit out of China in this self-managed portfolio.

Being a socialist state, China can easily manipulate their economic barometer numbers and they have done so quite well to date. Fundamentally, however, China is stuck between a rock and hard place, having to stimulate not only their own economy, but also indirectly that of the US. I seriously doubt the possibility of the US coming out of this recession within a year. China will take even longer to recover. This line of thinking motivated my sale of remaining CHN shares.

P.S. I purchased additional CHN fund shares on December 15, 2008 at $19.71 (before it paid distributions).