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John Thomas graduated with a bachelor’s degree in biochemistry with honors and a minor in mathematics from the University of California at Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was employed by a medium-sized Japanese securities house. Thomas became fluent in... More
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  • Chinese Internet Companies are Going From Strength to Strength 0 comments
    Sep 23, 2009 11:13 PM | about stocks: BIDU, SINA, SOHU, NTES
    After nearly four decades in the industry, I can tell you that stocks can be snarly, bad tempered beasts that would as soon as bite you as give you rabies. So it is a rare pleasure when I get to trade securities like the Chinese Internet companies, which have been purring away like domesticated kittens. If you need further proof of where the future growth in the global economy is coming from, take a look at Baidu (BIDU), the Google of China, which I strongly recommended on March 6. It has quadrupled from the lows to $400, and has been one of the best calls of my career. Look at the chart below, which is probably the most bullish one you will ever see.  In the meantime, our Google (GOOG) only doubled. These hedge fund darlings are best of breed companies, but the Chinese one outperformed the American counterpart by a factor of 2:1. 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 twin drags of a mature economy and staggering debt, 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 of course, BIDU- who are going to eat our lunch.
    Stocks: BIDU, SINA, SOHU, NTES
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