TraderMark

I'm Slowly Rebuilding My Chinese Position

lol
I am just waiting for them to hire you as full time staff writer!


On Sep 01 04:41 PM Zachary Scheidt wrote:

> I hear they've got some great research reports for slow market days
> :-)
>
> Oh well, good thing i'm not sensitive

I'm Slowly Rebuilding My Chinese Position

I don't think our opinion is very different. I am awaiting materially lower prices which I hope come to build a longer term position. I simply took back a stake in something I sold a month ago to begin rebuilding.

When the "I am pounding the table on China" article at 1750 comes out in 3 months, then we have a difference in option. ;)


On Sep 01 01:51 PM Joseph L. Shaefer wrote:

> Well, Mark, differences in opinion are what makes stock markets and
> sports betting interesting.
>
> For all the reasons I've expressed in recent articles, we disagree
> on this one so, if you wonder at the sudden liquidity and availability
> when making your new purchases of Chinese stocks, I'm the short-seller
> on the other side of the trade. At what I believe will be lower
> prices yet, I'll add to your buying fuel when I cover these positions...

I'm Slowly Rebuilding My Chinese Position

right, I am just using something that can be easily accessed in US markets


On Sep 01 02:14 PM Alan Young wrote:

> Good work, Mark, and a fine article overall.
>
> One suggestion: "the closest thing to China" i.e. Shanghai is probably
> not Hong Kong (seekingalpha.com/symbo...), but mainland
> shares traded in Hong Kong ($HSCEI). FWIW, the latter index is clinging
> tightly to support, right on the 50-DMA line and just 9.3% below
> the year's high.

I'm Slowly Rebuilding My Chinese Position

Alpha

Keep in mind it is common in China for OPERATION earnings to be buffeted by SPECULATIVE earnings - i.e. many companies use part of their cash for stock speculation. I have written about that extensively in 2007 on my blog. So I'd take my rook and push away your pawn and say, what you say are cyclical earnings, I say are earnings that benefited from a 90% gain in Chinese stocks. Life insurers do this in the US as part of their business plan, but in china is it very widepspread. i.e. we make widgets but 28% of our gains in earnings came from stock speculation.


On Sep 01 09:14 AM Alphameister wrote:

> Congrats on a good call. I routinely begin scaling back positions
> when stocks run more than 20% above their 50-day averages and have
> had abundant opportunities to do so with the China ADRs that have
> brought me incredible returns this year. Euphoria is always a good
> contrary indicator and you nailed it in citing the surge in new brokerage
> accounts. But the P/E you cited was based on earnings that were
> cyclically depressed by the preceding deceleration of growth in China;
> the explosion of money/credit during the past year should yield much
> higher corporate earnings in 2010. And the long-term bull market
> in China ADRs has plenty of room to run after this overbought correction
> has run its course.

I'm Slowly Rebuilding My Chinese Position

I'm with you Zach, all I did was get back a part of the position I sold 5 weeks ago at 25% off. Only 20% in, and wanting to lose on this batch so I can load up materially lower. But since we never know what happens we'll just put a stake in the ground here ...

p.s. not sure why you got 2 negative thumbs up. You didnt pump iamned.com did you?? ;)


On Sep 01 08:52 AM Zachary Scheidt wrote:

> Excellent timing on the sell Mark,
>
> I do think you'll get that chance to buy China significantly cheaper
> but like your strategy of legging into it slowly. Up to this point
> in 2009, we have seen buying of every dip and while I stay awake
> at night wondering what will happen when no one is left to buy the
> dip, the larger trend is still higher.
>
> This morning we're seeing some news about commodity buying again
> from China - Do you see a split Chinese market where hard assets
> are driven higher as the China reserve banks continue to build positions
> - while at the same time many equities associated with China business
> come under more pressure?
>
> The Yuan peg will also be a huge factor as foreign exchange balances
> appear tedious. Many question marks surrounding China investments.
>
>
> zachstocks.com

China: A Reason to Be Cautious

I don't disagree with anything you said. Wrote another piece on this topic this morning and said just about the same thing. Ride the roller coaster but realize you will need to jump off at the appropriate time, and please don't drink Kool Aid along the way.


On Jul 28 10:55 AM Relative Leverage wrote:

> There's definitely a bubble brewing over in China...in both the stock
> market and the lending market.
>
> However, if the last 12 months has taught me anything, it's that
> markets tend to be in an irrational state more often than not...and
> that it's nearly impossible to know when the sanity will return.
> That's why I try to leave my emotions out of it and just follow the
> trend.
>
> Identifying a trend is much easier than anticipating when that trend
> will end. I know it's hard to stick with a trade (or enter a new
> one) after a big run-up like we've seen in the Shanghai Composite,
> but sticking with the trend is usually the higher probability trade.
> Many traders try to time market tops and bottoms...but I've yet to
> meet one that has done so consistently. Fighting the trend is a losing
> proposition, in my opinion.
>
> I just posted an article this morning that gives you a technical
> take on the Shanghai Composite:
>
> consequencesunintended...

China: A Reason to Be Cautious

With correlations at record highs I dont think EWT will be spared if China corrects.

That said, if China can trade at 35x earnings it certainly can trade at 50x if thats the momentum in the market.

But when things reverse I expect the whole region to go together.


On Jul 27 08:18 PM RiskReturnOptimizer wrote:

> Momentum in China market is very strong as many investors who missed
> the latest rally are chasing performance by buying the sectors and
> countries that have strong strongest price action.
>
> It's not unlikely that FXI can go up another 50% from these level
> (I know, sounds like a lot, but that would take it up to $65) to
> build a double-top from the October 2007 high. Institutional and
> retail money that have missed the latest rally may jump in now to
> get the next parabolic move up. Sounds crazy, but very likely.<br/>
>
> For better risk-reward, consider EWT as a play on China and Tech
> . In case the China bubble burst, you can still ride the growth
> of tech spending, as EWT is correlated to QQQQ, but has more room
> for upside due to removal of geopolitical risks (closer ties to China).

China: A Reason to Be Cautious

Susan, I also do not like Russia

I prefer BIC

Or I hope Indonesia turns into a new era of political stability and we can do IBIC. Lots of potential there and the story is just getting started.

Russia is basically a call option on oil in my opinion.


On Jul 27 10:25 AM Susan Weerts wrote:

> Except Russia which scares me, the rests are pretty stable. China
> mades its economic development as its top priority, which brings
> huge successful. However, it also comes with huge consequencies.
>
>
> As a dicatorship, it can direct its resources more efficiently sometimes,
> such as in the early stage of industrial development.

China: A Reason to Be Cautious

What classification (label) would you put on the US? I like financial oligopolies myself. If you really look closely the corruption and cronyism at the top is not much different than many countries you deem to have "political risk". Living here we pretend it is not there or wish it was not there. It is just as bad as many other countries.

I think over the next 10, 20, 30 years the misused label of the US as "safe" is going to go away. We have basically shifted our private financial debts onto the public to (ahem) "save the system". Just like any good banana republic would do to save their oligarchs, and put the costs on the middle class.

Really is it so different?


On Jul 27 09:32 AM Prudent Man CFA wrote:

> None of the BRIC nations are democracies. China Communist, Russia
> Oligopolies, India Caste System and Brazil Socialistic with oil.
> Consequently, a higher political risk premium must be baked in the
> cake along with all of those other nasty unknowns.
>
> More of those risks I am clueless about so I stick to the U.S., which
> is tough enough.

Feels Like February in Reverse: Time to Add to Short Positions

Not that the china small cap run was "unworthy" but some names are just speculative junk and in latter part of moves you see those stocks move. I don't know enough about CPSL either way to make a comment on it.


On May 07 06:35 PM Wisdom vs. Information wrote:

> you commented on CPSL a few days ago, and after i looked at it i
> could not figure out why its run was worthy of comment (good growth,
> and great PE before the run). were you saying it is unworthy of its
> new price, or simply that the entire china sm cap run was too high?

Feels Like February in Reverse: Time to Add to Short Positions

SLV looks good here, not only do you get the precious metal thought but you can get some benefit from the (correct or incorrect) thought that the world will come roaring back "in 4-6 months"


On May 07 03:43 PM Dr. O wrote:

> Agree; now that the bulls have exhausted themselves for the time
> being, the markets (not just US but most equity markets world wide)
> look ripe for a pull back. At what point would you cover?
>
> I made a couple of comments on a previous article of yours from a
> bullish perspective which were poorly received, lol, but I should
> have pointed out that I am bullish on foreign, not domestic equities:
> BRIC, Australia, Canada, and commodities.
>
> I don't own a share of a US stock, or index ETF, or bond, or mutual
> fund. In fact, I'm becoming uncomfortable holding cash in US Dollars.
> If the Dollar starts to fall off a cliff, again, I'll diversity my
> non-retirement dollars into FXA, FXC, and FXY, as well as SLV and
> GLD. FWIW.
>

Feels Like February in Reverse: Time to Add to Short Positions

Nothing egregious - I am looking for 870 to 890 for now but we'll see - the employment report will move the market strongly

Then I am looking for a wider range of 820 to 950 for a while

then later in the year a retest of 750 and I think that retest should be bought

we'll see if that roadmap is correct and even if it is dead on, timing it will be impossible

but thats my 40,000 point of view

I believe S&P earnings for 09 will be under 50, but analysts still cling go 60
even at 60, with a 15 multiple you are at 900

I find it hard to argue that in the worst recession since depression you can hang something higher than a FORWARD 15 multiple on this mess. But bulls will try

I expect range bound and wide range - today was a good day but things can reverse

as always I run a hedged portfolio; I just weighted it to short yesterday for a while

in this market can change in 72 hours


On May 07 03:43 PM Dr. O wrote:

> Agree; now that the bulls have exhausted themselves for the time
> being, the markets (not just US but most equity markets world wide)
> look ripe for a pull back. At what point would you cover?
>
> I made a couple of comments on a previous article of yours from a
> bullish perspective which were poorly received, lol, but I should
> have pointed out that I am bullish on foreign, not domestic equities:
> BRIC, Australia, Canada, and commodities.
>
> I don't own a share of a US stock, or index ETF, or bond, or mutual
> fund. In fact, I'm becoming uncomfortable holding cash in US Dollars.
> If the Dollar starts to fall off a cliff, again, I'll diversity my
> non-retirement dollars into FXA, FXC, and FXY, as well as SLV and
> GLD. FWIW.
>

Feels Like February in Reverse: Time to Add to Short Positions

SWHC was down due to a lousy dilutive offering


On May 07 03:15 PM Sober Realist wrote:

> SWHC down big today. Beat your swords into ploughshares and grow
> a victory garden.

Feels Like February in Reverse: Time to Add to Short Positions

ASTI DSTI are my tells ... I've been in solar space since 2006, when ASTI DSTI start running usually we sell off within 3 days


On May 07 10:53 AM enigmadude wrote:

> You sound like an angry bear with no rational reason given for shorting
> any of the stocks mentioned. I agree that there will be some downward
> movement in the market at some point, probably soon. But why pick
> on ASTI and DSTI? Did you lose some $$ on them in the past?

Is China Pulling an Alan Greenspan?

www.bloomberg.com/apps...

Chinese companies may be using record bank lending to invest in stocks, fueling a rally that’s made the benchmark Shanghai Composite Index the world’s best performer this year, according to Shenyin & Wanguo Securities Co.

As much as 660 billion yuan ($97 billion) may have been converted by companies into term deposits or used to buy equities, Li Huiyong, Shanghai-based analyst at Shenyin Wanguo, said in a phone interview today, citing money supply figures.