Exactly. Why is it necessary to own Chinese stocks? I don't know why anyone would want to play China from the long side, the economy/country is a steaming POS as far as I'm concerned. But if you must venture into the waters, why not buy the HK stocks, the stocks that Chinese investors invest in? Get an account with IB and you can buy all the HK stocks you want. They start trading in a couple of hours. In HK, you're in the big leagues, the real deal, not this junky revese merger garbage.
The whole idea of company with operations in one country that has its stock located in a country thousands of miles away is just plain crazy. Once they get the money, what reason do they have to care what happens over here? They live in an entirely different world. They are very well insulated and protected from us.
If you want to invest in China, I say invest side by side with the Chinese. Then you have regulatory checks and balances, investor rights and protections, unlike here.
There are cheap HK stocks out there. Some very cheap. Go to the Global Value Investing board, we are discussing many, such as Keck Seng. P/E of 4.5, 5.4% dividend yield. Show me an RTO that can beat that. KEYP? LOL, sorry, they're halted ;-)
Keck Seng operates hotels, so they are tied to Chinese consumerism.
For that matter, I would say: invest in Brazil. Invest in Peru. Invest in Colombia. Invest in India. Hell, even Australia or Canada. These markets will prove to be much better investments than China over the long haul IMO. We have a large list of "growth at a reasonable price" names on ThrowerW's Global Value Investing board. Really attractive, fundamentally sound, exciting, yet significantly undervalued companies. I'm itching to buy many of them right now, even though I don't believe in the markets. The only reason I've had the courage to dip my toes into some of them in this negative market environment is that I have my China RTO shorts to help keep me hedged if there is a strong downturn.
That's the way to play IMO: use the China RTO's as shorts to hedge you as you step into some of the South American, Canadian, Australian, and South Asian names that are getting quite attractive right now, though they probably still have more to go on the downside.
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