Value Microcaps Motherboard

[Bobwins]

China back?

I subscribe to a Stansberry newsletter from Steve Sjuggerud. He is a long term guy who waits for big changes in trends. He has been right about interest rates staying low and recommended stocks and real estate several years ago and has been consistent and right. Recently he went to China and was amazed at the growth and profitability of the big Chinese internet companies. He got introductions to key Chinese companies from an ETF outfit called Krane. They have an ETF KWEB that invests in Chinese internet, about 40 in the portfolio. I bought some recently at $35. Now $40+. He believes 500% gains possible over the next several years and that the top pick, ten cent, will be the world's biggest cap company in a couple of years. Very fast growth, high margins, govt protection, barriers to entry are a few of the positive characteristics. Ordinarily I love microcaps but after getting burned in China once, why not pick a basket of stocks that have the margins, high growth of microcaps but just happen to have a lot of zeroes in their total revs and profits.

Here is an article from Krane that discusses emerging markets. Take a look at the table that lists their top holdings and the sales and profit growth.

http://kraneshares.com/dissecting-the-emerging-market-rally/

Sjuggerud was amazed at how Chinese use their cell phones for everything, including paying bills at retail stores. He believes that the US will follow this model instead of the US leading the way. AND almost 50% of Chinese still don't have access to the internet vs ~80+% of US citizens that have access. So China still has high growth potential vs the US in these areas.