Vincent Fernando

Goldman's China Portfolio: Professional Investing or Day Trading Rag?

Noted Mr. Lewis. I would just add that I would hope that the QFII investors were doing more than what you say. But I agree they are pretty much doing that.

Goldman's China Portfolio: Professional Investing or Day Trading Rag?

You seem to have found some pretty cheap stock picks, unless they are cyclicals. I'm saying it's pretty dangerous to buy "the market", and that Goldman's piece is far from "investment" material. Not saying that there might not be a good stock pick here or there. Hope the picks work for you.

Goldman's China Portfolio: Professional Investing or Day Trading Rag?

Freya: that's not true I know of pro's who have done well or at least ok through the crisis. You can be long/short, and you can also reduce your long exposure without going to the extreme of 100% cash. Note US treasuries rallied like crazy at one point during the crisis.

James: I am not doubting Goldman's ability to make money. What I am doubting is the ability for their latest China piece to provide a prudent way for their brokerage clients to make money. Let's look at what they say, not just stop at "Well they're Goldman, so it must be pretty good advice" The point of my article is that we should have some sort of value underpinning our investment decisions, especially if we espouse them to be rigorous and disciplined, and that Goldman's latest China justification is pretty similar to your average retail trader's thinking. Chinese shares are clearly stretched, note the market drops 5% on even the slightest inclination of the Chinese government reducing liquidity.

I'd be wary of thinking you can feel where the cycle is going without the support of valuation in case you are wrong. And there is no need to feel rushed to invest now. Buying China now is far from the trading opportunity of the decade. There will be far safer times to invest in China. There are also other ways to invest with exposure to China's growth, in other markets. Whatever upside one envisions based on further stretching of already high valuations and expectations, the downside risk is massive right now, risk-reward is far worse than it has been in awhile, and thus the investment case (not the punting case) is pretty weak. FYI I just found support from Andy Xie a long time China watcher. You can find it at researchreloaded.com/c... In either case, I appreciate your feedback.

Goldman's China Portfolio: Professional Investing or Day Trading Rag?

Consider: You'd think people would have learned that chasing a bubble isn't a robust investment strategy, given how recently so many got creamed doing so. The point of the piece is that bubble chasing is no better than a retail trader, and that you should expect more from "professional research". We all know that bubbles can run for quite some time, but a truly disciplined investor who has a knowledge of the history of markets isn't chasing them, even if for a few years others are making money, out of knowing too well the risks involved and that it can be a fool's game trying to get out before everyone else. Sorry, but I expect more from research if it's supposedly professional.