Saturday, January 09, 2010 11:55:08 AM
I'm the proud bagholder of well over 10,000 FREE shares of PAYI.pk, from several relatively small swing trades.
My down side risk is zero, upside is pretty huge if PAYI recovers, survives and ultimately prospers. Free cash to come in a tax deferred acct. Play small, diversify, have fun.
Most of my china plays are higher quality, profitable cos.
Here's some interesting commentary on China stocks....
The Hot China Party Is Just Starting
Once in a century. That's how I would describe both the economy and the markets in Q4'08 and Q1'09.
That sixth months was as ugly as you will ever see short of nuclear war. That last six months was the ultimate melt down after one of the most turbulent decades in stock market history. March of '09 marked the turning point to a massive bull market that will go on for some time- if you know where to go to find growth- BTW- don't look too hard in the US.
The first decade of the 21st Century was one of the worst in stock market history. Look at the S&P 500 for this turbulent time.
On January 1, 2000 the S&P 500 opened at 1469.25. If you had bought the S&P 500 at the open on January 1, 2000, and simply held it to the close on December 31, 2009, you would have sold at 1115.10. Net loss- 24%. That's right- ten years of capital in the "you can't lose over the long term" S&P 500 yielded a net loss of 24%.
It was an interesting decade fraught with all sorts of economic challenges. Looking back, here's a few events that loom large- the collapse of the "Dot-Com" bubble, followed by the massive corporate fraud I call "Enronitis", followed by 911, followed by a few years of prosperity thanks to ridiculously low interest rates and absurdly lax credit standards, followed by the bursting of the real estate bubble and the global credit implosion. Did I forget to mention oil ran to nearly $150 per barrel and poured gasoline on the global credit implosion?
All of these disasters have occurred against the back drop of funding a constant state of War since September of 2001. When you look back, it was a pretty brutal decade to be an investor.
In my view, the definition of insanity is doing the same thing over and over again, and expecting a different result. Here's what the global markets will continue to do over and over again- find an area of growth and or inflating prices, pile investment dollars in that direction, then inflate until the bubble bursts.
Here's my definition of a Bubble- a shared, mass speculative hallucination. If the recent bubble in US housing isn't the perfect example, I don't know what is. Zero down mortgages to unqualified buyers with homes 40% over valued- what could be more absurd? Nevertheless, if you had some skills for participating in bubbles, all you had to do was get out before it burst.
So, let's look at an under inflated balloon.
China Stocks- Your Window Of Opportunity
Here's the good news- China stocks aren't even remotely close to becoming bubblicious yet. Here's the bad news- you're only going to have a couple more years to invest in China companies on US listed exchanges. They are going to be leaving our shores in the next few years as China's investment banking industry grows from the current toddler levels to more mature industry. The US will lose that business.
Here's what will happen- The Chinese won't require our capital or investment banking expertise any longer. Their markets are opening up. There are only two exchanges in China- the Shanghai Exchange, which is the equivalent of our NYSE. All of the government owned and sponsored behemoths can be found on the Shanghai.
The Shanghai has about 900 companies, and is closed to foreign investment. With 1.3 billion potential investors, there's too much money chasing too few stocks. Hence, stocks tend to be a bit overvalued here.
Then there's the new Shenzhen Exchange. This exchange is only a few months old, and is the equivalent of our NASDAQ- but with only 30 companies at last count. It's new. Money poured into these 30 stocks the first couple of days. This exchange is where hi tech companies without government ownership are raising capital and going public.
Chinese companies are currently encouraged by their government to raise capital off shore. It's simply another way of having our capital flow to China. The ideas I've been sharing have US listings- either on the NYSE, NASDAQ, or BB.
Investment banking skills are lacking in China, but I believe in the next few years the Chinese will get a quick education in corporate finance. They have the capital, so it's inevitable many of the companies will be able to find capital and trading markets at home. The US, and others like it will lose the business.
China recently announced it would start allowing trading on margin, and open a futures and options market. In a few years, we'll all have to learn how to buy China companies in China. For now, we can still participate in some real bargains.
.... SOOOO, I'll just keep expanding for more and more shares of more and more of these cos., while others swing trade for beer, gas and taco money. :~) In a few years, we'll see who's smiling.
My down side risk is zero, upside is pretty huge if PAYI recovers, survives and ultimately prospers. Free cash to come in a tax deferred acct. Play small, diversify, have fun.
Most of my china plays are higher quality, profitable cos.
Here's some interesting commentary on China stocks....
The Hot China Party Is Just Starting
Once in a century. That's how I would describe both the economy and the markets in Q4'08 and Q1'09.
That sixth months was as ugly as you will ever see short of nuclear war. That last six months was the ultimate melt down after one of the most turbulent decades in stock market history. March of '09 marked the turning point to a massive bull market that will go on for some time- if you know where to go to find growth- BTW- don't look too hard in the US.
The first decade of the 21st Century was one of the worst in stock market history. Look at the S&P 500 for this turbulent time.
On January 1, 2000 the S&P 500 opened at 1469.25. If you had bought the S&P 500 at the open on January 1, 2000, and simply held it to the close on December 31, 2009, you would have sold at 1115.10. Net loss- 24%. That's right- ten years of capital in the "you can't lose over the long term" S&P 500 yielded a net loss of 24%.
It was an interesting decade fraught with all sorts of economic challenges. Looking back, here's a few events that loom large- the collapse of the "Dot-Com" bubble, followed by the massive corporate fraud I call "Enronitis", followed by 911, followed by a few years of prosperity thanks to ridiculously low interest rates and absurdly lax credit standards, followed by the bursting of the real estate bubble and the global credit implosion. Did I forget to mention oil ran to nearly $150 per barrel and poured gasoline on the global credit implosion?
All of these disasters have occurred against the back drop of funding a constant state of War since September of 2001. When you look back, it was a pretty brutal decade to be an investor.
In my view, the definition of insanity is doing the same thing over and over again, and expecting a different result. Here's what the global markets will continue to do over and over again- find an area of growth and or inflating prices, pile investment dollars in that direction, then inflate until the bubble bursts.
Here's my definition of a Bubble- a shared, mass speculative hallucination. If the recent bubble in US housing isn't the perfect example, I don't know what is. Zero down mortgages to unqualified buyers with homes 40% over valued- what could be more absurd? Nevertheless, if you had some skills for participating in bubbles, all you had to do was get out before it burst.
So, let's look at an under inflated balloon.
China Stocks- Your Window Of Opportunity
Here's the good news- China stocks aren't even remotely close to becoming bubblicious yet. Here's the bad news- you're only going to have a couple more years to invest in China companies on US listed exchanges. They are going to be leaving our shores in the next few years as China's investment banking industry grows from the current toddler levels to more mature industry. The US will lose that business.
Here's what will happen- The Chinese won't require our capital or investment banking expertise any longer. Their markets are opening up. There are only two exchanges in China- the Shanghai Exchange, which is the equivalent of our NYSE. All of the government owned and sponsored behemoths can be found on the Shanghai.
The Shanghai has about 900 companies, and is closed to foreign investment. With 1.3 billion potential investors, there's too much money chasing too few stocks. Hence, stocks tend to be a bit overvalued here.
Then there's the new Shenzhen Exchange. This exchange is only a few months old, and is the equivalent of our NASDAQ- but with only 30 companies at last count. It's new. Money poured into these 30 stocks the first couple of days. This exchange is where hi tech companies without government ownership are raising capital and going public.
Chinese companies are currently encouraged by their government to raise capital off shore. It's simply another way of having our capital flow to China. The ideas I've been sharing have US listings- either on the NYSE, NASDAQ, or BB.
Investment banking skills are lacking in China, but I believe in the next few years the Chinese will get a quick education in corporate finance. They have the capital, so it's inevitable many of the companies will be able to find capital and trading markets at home. The US, and others like it will lose the business.
China recently announced it would start allowing trading on margin, and open a futures and options market. In a few years, we'll all have to learn how to buy China companies in China. For now, we can still participate in some real bargains.
.... SOOOO, I'll just keep expanding for more and more shares of more and more of these cos., while others swing trade for beer, gas and taco money. :~) In a few years, we'll see who's smiling.
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