So I think the following chart says a lot ...
CSI 300 Index vs the S&P 500
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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