Mad Hedge Fund Trader

Confucius' Three Keys to Successful Leadership

How come China's Google is better than ours? If you need further proof of where the future growth in the global economy is coming from, take a look at Bidu (BIDU), the Google of China, which I strongly recommended on March 6 (www.madhedgefundtrader...). It has jumped 280% from the lows to $280, and has been one of my better calls of the year. In the meantime, our Google (GOOG) rose by only 48% to $435, just 8% more than the S&P 500. These hedge fund darlings are best of breed companies, but the Chinese one outperformed the American counterpart by a factor of 6:1. This is the consequence of the US economy making a permanent shift from a 5% growth rate to 1.5%-2%, and is a pattern you can expect to see repeated around the world for the next decade. The cruel truth here is that American companies, with the drag of a mature economy, will never command the same multiples of Chinese ones. When looking for long equity exposure, always look for Chinese ones first. Expect huge growth of the four horsemen of the Chinese Internet sector-Netease (NTES), Sina (SINA), and Sohu (SOHU), and BIDU- who are going to eat our lunch.