Paul Denlinger

Investing In China's Online Gaming Sector

When a retail investor invests in a Chinese game developer and distributor, they are essentially investing in the management's ability to develop and/or distribute a hit game title. This story made a lot of sense when Shanda went public in 2004, but in 2007, it makes no sense because it is too risky and time-sensitive.

With the rapid rise of China's domestic A-share market in 2006, one can make MUCH better returns on a steady basis, with a lot less risk than the online gaming market.