#21
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Re: I want to go long china
It's also not only about China P/E being high, but also whether that P/E will ever adjust to what it "should" be. It could remain like that for another 10 years who knows, so saying its too high or too low is irrelevant if you have no idea how/if it may adjust.
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#22
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Re: I want to go long china
It will adjust, 37 is incredibly high for an entire index. Google's PE is 42 right now. That means the entire country of China is expected to grow about as fast as the highest flying stock in the US.
China's stock market is a mania. No one can say when it will end. The tech bubble was overvalued for years. |
#23
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Post deleted by Mat Sklansky
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#24
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Re: I want to go long china
I'm not a speculator, but it seems to me that the best way to go long on China is to go long on Commodities.
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#25
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Re: I want to go long china
[ QUOTE ]
Many people think Google is a mania as well, I do not agree. The fundamentals there are extremely sound [/ QUOTE ] Next on the list of things you seem completely unqualified to determine and chose to say without even a semblance of explanation... |
#26
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Re: I want to go long china
Booming China means standard of living slowly increases throught the country. More construction, more spending on everything and so on...
So this is bullish for commodities in general because of increased demand, w/out even going into details. |
#27
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Post deleted by Mat Sklansky
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#28
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Re: I want to go long china
[ QUOTE ]
Booming China means standard of living slowly increases throught the country. More construction, more spending on everything and so on... So this is bullish for commodities in general because of increased demand, w/out even going into details. [/ QUOTE ] almost there. thing is, china has a saving culture. their citizens do not consume anywhere near the rate you'd expect. in fact, if they did, china would have an even harder time slowing the economy. instead, their savings have been flowing into stocks as that becomes all the rage. millions of new accounts are opened monthly. in terms of "goign long on china" in a sense you can do that with commodities. in part though, china has been growing so fast also b/c the WORLD has been growing. china imports many things from around asia, uses its very cheap labor to compile them into a finished product and exports that product. the demand for chinese exports has helped spur their growth. so a bigger than expected slowdown in the US will hurt commodity prices. also, non-chinese growth rellated things will hurt/help commodity prices so a bet on commodities is just that, a bet on commodities. betting on the Yuan isn't exactly long china either since you are more betting on how the govt will handle the currency. true, the faster china grows, the more pressure there is on the govt. but we know they will do little more until the elections in a few months (or whatever the govt there does, but i know it is in a few months so thats that) the yuan appreciation is farrr lagging the growth story, so much so that a vast oversurprise of growth will push the govt the revalue the yuan at a faster rate, but a huge slowdown would still leave the yuan vastly undervalued. it would still need to appreciate. so the yuan is headed up almost irrespective of the growth situation (a very large downside surprise though would give the govt. more time so the yuan could conceivably stay at its current level longer) so that leaves us with the question what CAN we bet on that is as close toa long china bet as holding the shainghai index itself? well, imo, that is the stock markets of the surrounding areas (thailand, korea, vietname etc.). those countries are highly dependent on china as an export market since they export many of the parts that china combines into finished products w/ their labor. one way to test that is to find the corerlation between their stock markets and the chinese stock market. i bet it is around 80% (when china market goes up, they go up almsot every time and vice versa), maybe even higher. the disconnect here though would be that the chinese market is now being pushed up not only by fundamentals but by a frenzy to own stocks by the savers of the country (who are many). so you wouldn't get the size of the shanghai moves, but you would get the long china growth from ivnesting in surrounding stock markets. hope this helps. Barron |
#29
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Post deleted by Mat Sklansky
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#30
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Re: I want to go long china
Nice point Barron...
Japan has a different market dynamics then China. They have a very particular situation since they are coming out of 20yrs of deflation. A more direct way to invest in China is through the Hong Kong ETF. Their economy is very interrelated, many chinese companies have their stock listed in the Hong Kong exchange, and it's probably one of the most respected/trusted exchanges in Asia. |
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