I sometimes like to pretend the market isn’t all knowing and there is some unforeseen value yet to be unlocked. I envision myself a maven diving into a thesis trade before everyone else. I wade into names that are hated and wait out the storm until the worm turns and sell into the reward.
This actually rarely happens and I’ve maybe done this in practice 5 times during my illustrious trading career, instead opting for buying what is working now in favor of what might work in the future.
But we can still dream and they can never stop me.
On the issue of dreaming, I often think about China and how the Hang Seng is down at 15 year lows, harangued by the communists and their machinations — bedraggled by autocrats who show little respect for free markets. Nonetheless, from time to time the Chinese really do give a good run and according to the data — that run, dare I say, might happen soon.
Based on the seasonality data inside Stocklabs, Chinese stocks do best in January. Do not ask me why, as I am not interested in providing you with any answers. Just accept it as a fact and look at the graphic for $BABA below.
My favorites are $BABA, $NIO, $WB and perhaps $BEKE. There are many others and the winner this year has been $PDD. But I think any liquid China name will suffice, if the likes of BABA rampage higher in January.
The trick here is to stay with the trade. We might get a 10% pop and then get lured into another trade, tempted to sell out of the China trade just as it’s getting started. I feel I need to work on being more patient with some of these thesis trading ideas and may do so in 2024.
Food for thought as you trade the chop-slop.
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