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China Mobile: Tea Leaves Give Mixed Reading

Pipo..... Rogers has been saying this for a long time. In fact, he has been saying this as the FXI has fallen from its peak to its present 65% loss. Rogers has said many times that he is not a market timer, so if you have his cash, then you'll probably do pretty well. If, like most investors, you do not have his collateral, then you might want to buy China when it shows signs of life,

There are signs of panic in China right now. Just look at their 30% rate cut last week, their unemployment figures, the drop in their exports and production, their pollution problems, their real estate deflation, collapsed car sales, their fraudulent banking issues, etc... etc.. If you want to buy China, I'd seriously study it, rather than just listening to the latest 5 minute blurb on CNBC, or pronouncements from one Guru or the other. If you are serious, then, I'd buy James Trippon's book.. "Become Your Own China Guru", then I'd read 'Oracle Bones' and subscribe to Michael Pettis' excellent RSS feed at mpettis.com. Unfortunately, we Americans tend to measure the rest of the world by our own yardstick. Other countries have a different perspective. If you do not understand their perspective and where they are coming from and how they fit into this global jigsaw puzzle, you don;t know what you are buying. That's a recipe for disaster. And, speaking for myself, I don't need any more pain this year.

Sorry about the sop-box rhetoric, but aside from the issues I've indicated above, there are particular issues that affect CHL. To become completely familiar with them, I'd Google 'China Mobile' and 'TD-SCDMA'.. I'd also read up on the Chinese governments manipulation of these three players in the Chinese phone market. There have been some excellent articles here on SeekingAlpha. Briefly, the government has forced the merger of the two smaller players, and has forced CHL to accept their proprietary TD-SCDMA format. They have forced CHL to fund the smaller players, and have allowed the other two companies access to the globally compatible formats as stated above.

This is not to knock China. China clearly is more inwardly looking than the rest of the world. Further, they have stated they are not interested in playing nice with anyone else if it compromises their future. Nothing wrong with that. Don;t you wish our government had done the same?

Anyway... Nice article.... jegan ;-)