http://www.youtube.com/watch?v=mtfjaQWjb0g&feature=related
Sentiment is roundly negative regarding China, and yet emerging markets and global basic materials have seen some inflows in recent weeks. Note the massive, five-year symmetrical triangle on the FXI chart below, that appears to be coming to a head.
One thing to note about China–It already crashed in 2008. Just as the dot-com bubble reached out and priced in years of growth, the China crash in 2008 was so ferocious that it likely reached out and discounted years of ghost cities, phony government numbers, etc..
Thus, I am inclined to look for downside to be very limited here.
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The sucky thing with investing in China is the difficulty finding names that you can trust. There are a lot of crooked adr’s/companies.
Try companies that have published a reconciliation of SAIC tax filings to SEC tax filings covering a contiguious extended timeframe….LPH….Check
Try companies that have proven they are shareholder-friendly with not diluting shareholders when they expand…..LPH….Check
Try companies that have a track record of puting their profits back to work into expanding over the last few years…..LPH from 2009 to 2012 went from 1 facility, 50,000 metric tons, to 3 facilities, 220,000 metric tons…..CHECK
Try companies in industries where demand is pretty much guaranteed (like oil) and which have a simple business model (not snake oil)….LPH….CHECK
Did you see what happened to LPH?
Don’t trust Chinese burritos – ever.