It's going to get very exciting in the topsy turvey world of Chinese stocks now that Morgan Stanley's Marry Meeker is covering more than a handful of stocks out of the PRC.
I sure would love to dump some money into Chinese pure-plays but I still have reservations about what the CCP will do in the future. You have got to figure that should the CCP invade Taiwan, all Chinese stocks will drop at least 35-40% in the week after a bloody invasion and war. Why would Chinese stocks fall in the event of a war between the two countries?
Well, you can bet your bottom dollar that the US and Japan would come to the rescue of Taiwan. Voila - WWIII. There would be serious sanctions placed on Chinese companies and trade would most likely be affected. You can forget about your money in China. In a war, your money becomes property of the CCP. No lawsuits. No money. Do not pass Go. Do not collect $200. See ya later.
I believe the future lies in the US and Japan getting along better. As these two countries are the #1 and #2 leaders in GDP, you can expect the trade to continue to grow.
And if you are ready to invest in China, you should be demanding a 25% discount on everything. Anything less that 25% is a fool's game.
CBS MarketWatch: China's Prospects
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