FXI +0.6% premarket after China reported speedier than expected Q4 GDP growth overnight. The...

FXI +0.6% premarket after China reported speedier than expected Q4 GDP growth overnight. The Shanghai Composite rose 1.4%. The Hang Seng (EWH) +1.1%. A separate report shows home prices rising in 54 out of 70 tracked cities, the most in 20 months. 
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  • vallies
    , contributor
    Comments (346) | Send Message
    Well, I am the only one here again. I think some things have to be considered in the Chinese Shanghai class A shares. You have to look back at why it fell, how far and how long. You also need to have to compare it to other exchanges. Lets,for a moment, look at the last first and compare it to volatility. As you can recall, there was a time of great distrust in our markets. The day to day swings were enormous. Two to three percent moves were not uncommon. No one trusted what ,if any, the governments or SEC had to say. They let lies and had told themselves about what was going on before the collapse and no one would believe them. Well, here we are now, well of the Hanes bottom, we miss you much Mark , and things have improved sharply. The samething goes with the Shanghai. It is hard to trust some of these securities, we don't know what we are looking at and if we do look, how do we know if the government is telling us the truth. Well we might not yet, and that is why I own CAF. Looking much forward into the future, I think of what Larry Fink of Blackrock, the best in the business, had to say on the rate of age in the Chinese population. They are getting older without as many replacement's. They need to do something to carry covering costs of this. So how do they increase weath overall to pay for this. I believe it will be many fold and some parts of this will be in bringing the middle class and middle lower class to a wider base. This will be one way in bringing in more taxes, widening the base. Something we have to do. And wealth creation is brought through markets, not entitlements. Expanding both over in China will take time, right now they have to reduce pollution, investments in these are going to be needed, the government can help, but for long term debt reductions, the market is the better answer. We pick and chose the viable winners through performance, China knows this so it is starting a campaign in this by opening its markets through more trusting meters and measures and that is us. It will expand to include more rigorous tools to view its securities and thus make better analysis. Till then I will participate in the class A through CAF, a closed ended fund. Next time I will be looking at how CAF pays out dividends.
    20 Jan 2013, 11:06 AM Reply Like
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