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Tuesday, March 22, 2011

Invest in China?

So I think the following chart says a lot ...

CSI 300 Index vs the S&P 500
1 Year

And 'on the other side of the bay' as it were ... the Hang Seng has been getting smoked in the last five months.

As "Dasan", Anthony Davian and others have noted, the fraud stories coming out of some Chinese companies almost defy description and belief.

I would say: "I tried to warn people", but I'll save that speech.

This all does lead me to another topic ...

It has to do with my complete confusion regarding this concept that I hear so often of ...

"Pull your money out of U.S. stocks, and then put your money into investing in Chinese companies, because China is a growth sector"

Seriously? That makes absolutely no sense to me whatsoever. Yes ... I do believe that China is a growth sector. So if an individual wanted to invest in the growth sector of China? Why not play the flow of large cap international companies that are currently focusing on expanding into the B.R.I.C countries, and are weighting towards China?

Why take your money out of companies that are expanding into China, to invest with unknown Chinese companies in which it is much more difficult to do your own due diligence? Just keep the money with large cap international companies expanding into China. That certainly seems the best way to mitigate fraud risk with unknown companies that seem to refuse to adhere to well accepted accounting standards.

So ... sorry ... I'll keep my money with the international companies that are focusing on selling Coca-Cola's and boxes of breakfast meals to over one billion Chinese ... thank you very much.

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Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that displayed using the ThinkorSwim platform, or any other charting software are believed to be public domain. Any other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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