China's Bear Market Bottoms Out On ...
Posted
Mar 31 2008, 08:38 AM
by
Richard Schwartz
CHINA again and again. I write about China so much that I get bored with it. But China is the new global power and thus very important. Plus commodity advocate and long term perspective guru, who I haven’t seen call much wrong, Jim Rogers believes so strongly in China that he sold his NYC townhouse and moved to Singapore. And got his daughter a Mandarin-speaking nanny, all to live closer to where he figures the forthcoming action and big profits are going to come from next. Plus he predicted a big sell off in China, which by the by, fell another big -5% today, and that’s coming true. A sell off he figures will be a great buying opportunity. Plus, Jim not Jimmy, he hates that moniker although I’ve heard three people on CNBC including popular Dennis Gartman call him Jimmy recently. Obviously they don’t know him well if at all if they call him Jimmy. Sort of reveals some of the hot air on the Street. Anyway, I want to keep a close eye on China now. Because I have to agree with Rogers that China is riding a major wave and I want to get on that wave at some point although I wish one of these financial media types would ask Rogers some insightful questions about China instead of the usual mundane questions like what he thinks about the Fed’s latest moves. We all know by now that Rogers believes debasing one’s currency as our government and Fed is doing has never proved a good move in the past and won’t be this time either. I just wish someone would ask Rogers about China’s amoral behavior to start. Moving on, here’s what’s been going on in the Chinese indices: Date of Top % Move DownShanghai Stock Exchange Composite 10/16/07 -44%USX China Index (symbol HXC) 10/31/07 -36%Hong Kong 10/30/07 -28%Taiwan TAIEX Index 10/30/07 -24% (low on Jan. 23, 2008) * Rogers just mentioned that he’s buying Taiwan now because, even before the recent Taiwanese elections which the more pro-Chinese mainland candidate won, he sees more China/Taiwan economic ties going forward. This should greatly increase Taiwan’s prosperity piggybacking on China’s wealth. This is probably why Taiwan set a near term low back a couple months ago. Taiwan has an ETF (symbol EWT) which I’m looking to get into at some point, both trading wise and investment wise, waiting at least for the celebration on Monday, after the election, to subside. Schwartz View: My best guesstimate is that China’s stock markets bottom out during or around the August Olympics. From now until then, worldwide attention is going to be drawn towards China and all the bad, illegal, unethical, polluting and amoral activities and policies its currently following. Protestors will show up all along the Olympic Torch’s 100 plus day path and journey from Greece to China with reports in that London and Paris are scheduled protest points along the way. All the while Chinese inflation is out of control, food prices are way up and internal protests are going to add to China’s woes. And millions of new Chinese investors who opened their first stock brokerage accounts last year are now seeing their portfolios shrink which feeds on itself. The government itself has its hands full trying to reduce the smog that’s lies heavy over Beijing and is also in the process of tightening, not lowering interest rates, to do something about inflation caused by massive foreign money coming into China. Manipulating the stock market upward is the least important item on China’s agenda, at least for now and until the Olympics wind up. But when a bottom does come, we certainly ant to identify it as quickly as possible. Rogers, with his in depth studies of past bull and bear markets in any and all investments including directing his college students to help, and his world travels by car and motorcycle, has a long term global view I trust explicitly. And I can’t say that about many if any other pundits.
Filed under: China, Principles of the Stock Market, Richard Schwartz, China View, The Coming China Wars, The Principle of Primary Trend, Seven Principles, Global Investing, Commodity Bull Market, Historical Perspectve, Jim Rogers