Well I am probably the last to know but the S&P 500 Total Return Index (so regular SPX plus dividends) can be charted on BigCharts.com with ticker SPYZ. Seems useful to me.The Shanghai Composite has gone on another run down and closed today at 2868 down 53% from the peak last fall and down 45% YTD.
I've disclosed being out for a while now with the intention of going back in and I think the time for me to go back in is quite soon. From 15,000 feet China will not go out of business and it has more than cut in half.
There are three stocks that I am willing to buy but have not decided exactly how to move back in with these names. In most instances I weight a stock at 2 or 3% of the portfolio. I will not have 9% (three stocks at 3% each) in China and I doubt I would have 6% but I think I could go with two stocks each weighted at 2% but, in the interest of talking about process, that is where I am for now.
My preference is for individual stocks as opposed to ETFs because I am not thrilled with the composition of the ETFs. FXI and GXC are heavy in financials and PGJ seems to change it's weighting often enough that I don't think you can get a real good handle on what you will own a few months from now.
Obviously I have no expectation of timing a bottom with this but it is very likely that the bottom comes after a big decline at a time when far fewer people are interested and those who are interested would be very cautious about going in.
9 comments:
Gee, I wish I'd read this a month or two ago, before getting in too early!
Roger, I'd like your opinion about TAO, which invests only in Real Estate in China, and CHN, a closed-end fund. These might be more appealing than the ETFs you mentioned.
--AAlan
I wonder if it's necessary or prudent to jump back into China this early. From your post, I take it you have serious reservations as to whether the Chinese market (or your individual 3 stocks) have hit a "bottom." Wouldn't it be better to be a little late to the party than early?
I started putting money in FXP well after China's market had started to decline and it has still been profitable for me.
I'll be the first to admit that I'm no expert on this and I could be very wrong, but it seems to me that trying to pick a bottom (or even trying to get ahead of the bottom) may be taking on more risk than is worthwhile for the reward.
Alan, I posted an answer to you on the RE Price ETF post, had the wrong window open.
Dave, it may not be necessary. Buying a market that is down 50% in eight months in small doses may turn out to be wrong but i'm not sure imprudent is correct either.
I specifically say no expectation of buying at the bottom but the story on the ground is what it is, using an example I used I few days ago, from the bottom in Citi in 1990 it went up 3000% in ten years. In that light if the first 50% on your purchase was down--did it matter?
If I were interested in investing in a regional bank stock and wanted to do an evauation from information readily available to us common folks, what should I be looking for and where is the information readily available?
Roger - what would be a good proxy for china? I have been looking at couple of names but wanted to get your view?
Roger,
You raise a fair point and perhaps "prudent" was a poor word choice on my part. But I don't think your example of Citi in 1990 is fair. It's just as easy to find stocks that did not turn out so well. For instance, would it have mattered if you bought Bear Stearns in late March? Absolutely. Or Lehman Brothers today? Or Nortel in late 2000? Yes again.
Also, I don't know which 3 stocks you are thinking of, but it's hard for me to imagine that in an emerging market like China, they would have the same long history and fundamentals of a Citi, or that individual investors would be willing to tolerate their high volatility for 10+ years in the same way they may have the same long term perspective on U.S. blue chip financial stocks.
Hi All,
I came across a China fund that showed little or no decline in the last few months, and is actually up for the year (up more than 30%). I think it may be too good to be true.
However it is not a registered U.S fund. It is a private mutual fund, based in Spain. Are fraudulent funds a problem outside of the U.S.?
(They also have two other funds with outrageously great returns and no yearly losses.)
I would be interested in your opinion: tramita.com
Glen
Hi Roger,
You left us all in great suspense since you omitted the three Chinese names you have in mind. I agree with you in terms of the Chinese ETFs as not the best place to play because of the issues you mentioned. I also much prefer Japanese financials. My favorite areas of interest in China are in the Transportation, Energy, and Pharmaceutical industries. China is a 10 year growth story there is no need to rush and pick your entries wisely.
PTR, SNP, GSH, HMIN, WX are a few names I'm interested in
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