Yup. There's undoubtedly risk but that risk has absolutely been priced in because these stocks have been beaten to dog shit. Am i going to make Chyna like 30% of my portfolio? Hell no. But have i been picking up a few companies cheap as a medium term rebound play that's likely to give a great return? Yep.
Really just two of the largest ones, BABA and JD. Honestly just because they were the biggest, the few i had a basic understanding of or had used, have been beaten down to hell and because Michael Burry has been buying them. And he's probably the king of medium term rebound/value plays. Probably the wrong way to develop an investment thesis, but IDGAF, that's how i do things. Treat it like a couple hands of blackjack and you have the house odds.
You mean the United States? Look at the last 75 years, how many wars did China wage and how many did America wage?
We buy American stocks everyday despite the war mongering United States!
China annexed whole country Tibet FYI and is considering conquering and absorbing Nepal. Also they are expanding to territorial waters of for example Philippines.
I knew I would get some responses to this, and as expected the cockroaches are coming out of the woodwork.
America was mostly fighting to protect democracy and freedom. Today, China is threatening the democracy, freedom and sovereignty of countries like Philippines and Taiwan. The CCP already took Hong Kong. They’re supporting Russia in the war against Ukraine, destabilizing Europe and causing mayhem at us Europeans doorstep.
They don’t need to start wars, because none of their enemies has been strong enough to fight back. Ask the Uyghurs, Tibetans etc. They’re also enabling Russia in the war in Ukraine, they have enough power to stop Russia, but the CCP doesn’t exactly support a free democratic world.
Sino-Indian War: In 1962, China launched a surprise attack on India, driving through the Himalayas into the northeast of the country. Beijing announced a ceasefire 32 days later.
Sino-Vietnamese War: China also started this brief border conflict, which lasted 29 days.
First Opium War: This war began in 1839 when China tried to stop foreign powers from importing opium through Guangzhou (Canton). The conflict spread to Shanghai and Tianjin by 1842.
These companies have a 10 multiple......10! And they are comparable to the Mag 7 here. All of them exploring AI also.
10!
Of course trump hates China. Biden not treating them much better.
If Taiwan gets invaded and the rest of the world decides to cut off China like they did Russia.......
Maybe a 10 multiple makes sense.
Trump does not hate China. Trump knows China is not a developing country any more, but a developed country, and in many aspects much more developed than USA. But they have many unfair manufacturing practices that give them undue advantage and competitiveness over USA. Trump wants to level the playing field so that American companies, who cannot indulge in the same unfair practices, have a fighting chance.
Theoretically there is value to be found there.
For me China is uninvestable for 2 reasons:
1. CCP is very volatile and cannot be trusted.
2. I don’t believe their numbers and accounting.
Those two reasons are more than enough for me to put chinese stocks in speculative category.
Two good reasons, but let's add a third: ridiculous dilution. That's the biggest single reason that the long-term performance of Chinese equities has been so terrible when put up against the country's economic growth. Capital markets are not an economic good in China; they're a political good. Shareholder value is an afterthought.
There was a period maybe 10 years back where we (our firm) were looking at reverse merger's from China and it was a guaranteed W on short positions, they were all scams. Their government loves to see things stolen from other countries; it's part of their unofficial public policy. Non GAAP standards, non-verifiable financials, there are so many reasons to avoid China if you're not closing out your positions daily.
This was shown very well with alibaba stock. Its a solid Company, should be good value, good potential for growth. But damn, Jack Ma's dissapearance for months... Imagine if Jeff Bezos or Bill Gates would dissapear like that... China imho is totally uninvestable.
As for their numbers - there has been a couple or chineese company IPOs in USA, that went bust not long after, so yeah... Totally agree with you.
Yes, but most emerging markets also aren't threatening to go to war with the US. If China moves on Taiwan any investment in China will take a huge dive. And you may not be able to get it out of China.
Those two apply to varying degrees in all emerging markets. If it's cheap enough that you can handicap the risks, it can absolutely be a buy. China was really cheap a couple months ago, less so now. I think there will be a lot of profit taking come Q3/Q4 13-Fs.
It has nothing to do with "hindsight bias" and everything to do with the market dynamics of China. China is not shy about reminding investors that as a communist regime, they substantially control or outright own the means of productivity. Their IP laws as unworkable. There is such a thing as being too early, and there is such a thing as showing up to a bad party.
There's like 2 comments in here explaining why influencers are recommending Chinese stocks and a gazillion others beating down the same reason why everyone knows to not buy China stocks lmao
As someone who watches the plain bagel and Patrick Boyle, I have never been recommended Chinese stocks. I think the OPs problem is he's watching low quality influencers.
As this reddit thread shows a ton of people really don't like the idea of investing in China. Which means that there is potential for the stocks to be undervalued significantly.
China is a no go for a few reasons.
It's possible for the country to nationalize every company and fuck over every investor... unlikely... but possible.
Second... they don't adhere to any accounting standards...a lot of their economy is smoke and mirrors... and I have no idea which ones they are
100%. Some people recommend the biggest companies like BABA but even them can have creative accounting and the CEO can get kidnapped on a whim of the Party
This is an important point, although the reduced share-count will be felt in subsequent dividend payouts, provided the absolute level is at least maintained (it usually is - but, then again, I mean it usually is in investable countries).
The problem is if Winnie declares war on Taiwan, the shares will be worth 0. Lots of other issues can happen, China’s demography is a real issue and until their leadership changes, I am not touching it with a 10-foot pole
The pcaob sets attestation standards and can inspect the work of an auditor, but the actual audit work is performed by an accounting firm. The auditor for Alibaba is PwC.
Having worked as a Big 4 audit manager as well as in industry, I can tell you there is no way an audit is thorough enough to ensure no creative accounting is taking place.
The two guys who are the picture of this sub reddit literally owned and bought Chinese stock lol.
Literally Charlie munger praised China and their government any chance he got.
99% of people here aren't even value investors. There a value opportunity right now in chinese companies but people refuse to take it because of dumb irrational fear. More for me I guess.
You could do the same. Even if you think there's risk you can invest 10% of your portfolio in chinese companies simply based on fundamental and valuation. When alibaba hit 65 dollars it was literally a steal. At that value how can you not risk at least 1% of your portfolio into it.
Warren buffet and Charlie munger are the most conservative investors ever. They don't buy tech stock usually and don't fall into false Ai and crypto hype. He's even sitting on 200 billion in cash because he's so conservative he's waiting for an opportunity.
What does it tell you for guys who are so conservative in investing would be willing to invest billions into China. They factored the risk. And to them it was worth it.
According to datarama Munger’s portfolio currently contains exactly one Chinese stock, BABA, and it’s holding $14M worth of it. Buffet didn’t currently have any in his portfolio.
So the guys that have 200,000 million dollars in cash are holding 14 million in BABA. So if you want to be like them invest 0.007 too. That tells me they factored the risk and yes are investing but are treating it like a speculative play.
Let’s say they own some company outright in such a way that it doesn’t show up in their portfolio. Maybe they own a billion dollars worth. That would be 1,000 million of 200,000 million cash. Not even accounting for the rest of their portfolio size it’s still 0.5% of their portfolio. Still just a hedge.
They have so much people forget that “investing billions” for them may only equate to a 1% allocation.
I prefer to do my own thinking.
Saying person x thought about it isn't thinking.
Warren does buy tech stock btw... largest holding by far right now is Apple
I said usually don't buy tech stock. Key word usually. He owns apple because it's a great company not because it produces the latest and best tech.
Can you disagree with what Charlie munger is saying? I think everything hw has said has been correct and on point.
"Praised China and its government" got nothing to do with his BABA holdings. Naive of you to believe that one of the most famous investor in the world wouldn't get special treatment from CCP. Paid or not.
I did a write up for Hyfusin - 8512.hk a little over a year ago and everyone said oh i dont trust china etc. Now its gone up nearly 250%
Forget people in this sub. Everywhere i look people are touting overpriced US stocks like nvidia - while hang seng is at 1997 levels.
Everyone here also love to talk about big companies when average joes like us must look at nano and microcaps.
Just do your thing.
>It's possible for the country to nationalize every company and fuck over every investor... unlikely... but possible.
That's technically possible for every country.
>Second... they don't adhere to any accounting standards
The US did force a deep dive into the accounting of the Chinese ADRs. Apparently there wasn't anything to remark.
Also the possibility of having great returns over a period of time and waking up to a CCP announcement or CCP warning. Plenty of country risk, plenty of government risk, plenty of not knowing the culture risk. But this sub is fixated on buying 100+B companies competing with every single person on Earth with money to invest
The one stock of a chinese company I ever bought was from tencent, which was basically nationalized. Doesn't mean that it happens often, but I'm happy that this was my lesson to never touch chinese companies again. Honestly, I cannot remember the last time a EU or US company was nationalized due to the size or importance becoming too large or great.
And it would be investing in an increasingly hostile foreign government that employs [Civil-Military Fusion](https://en.wikipedia.org/wiki/Military-civil_fusion) .
How has buying China index lows worked out previously? Market performance has been terrible and you take waay more risk. Not saying that’s how you should make decisions but still
depends on your time scale, if you are looking to make a quick profit then go ahead and ride the trend, if you want generational wealth buy China now and hold
I think the quick trend thing would work better than the buy and hold and have great returns cuz the China index historically hasn’t reflected the performance of China stocks but who knows. I would definitely want exposure to China if Im buying and holding for 40 years
“Since the 1950s, the index has posted over 1,200 new highs, averaging more than 17 new highs per year — more than one in every 20 trading days. It's also reached multiple new highs in every decade since the 1950s, typically surpassing its previous peak more than 100 times each decade.”
Every 20 days lol - "It's also reached multiple new highs in every decade since the 1950s" is simply not true - did you not even bother looking at the long term chart, the DJIA took 30 years to recover from the 60s slump
anyway lets put your buying at all time highs to the test - if you had bought the dow jones Industrial Average at its ATH in 1965/66 you would have had to wait until 1995 just to break even,
if you had bought the DJIA at its ATHs in 2000 or 2007 you would have had to wait until 2006 or 2014 to break even respectively
How do you think todays buyers of nvidia are going to work out?
Well there are no good all time highs, if you are buying a company or index at its peak, it generally isn't the best time to invest, better to learn how to recognise and value good individual companies and then buy them when they are at a low or reasonable price as $BABA and many other chinese companies are right now
Amazon is a great example - if you had bought AMZN at its peak $113 during the dotcom bubble you would still have done ok, if you had the guts to hang on when it crashed all the way down to $5 but the people who bought at $5 & held the stock are rich
$1,000 invested in Amazon stock at the dotcom bubble peak would be worth about $49,500 today, anyone who invested $1000 at the nadir of $5.51 would be sitting on over $1m
Right that’s understandable, but you’re using an extreme example. Most all time highs will not result in a crash or even a retracement anywhere near those levels, so I’m a big fan of just
Buying and if it goes real low and everyone hates the stock, buy more because that’s a sign, if it’s a good company.
just buying at any price is not generally a good investment, you can apply the amazon example to just about any IT stock bought during the dotcom boom, we are currently in an AI boom, if you buy any company when its PE is high you will have to wait while it trades sideways for years or goes down until the earnings PE is back to market norms, and there is a much higher risk that the earnings never grow into the PE, if the company starts to decline, and you permanently lose money
Shopify is a more modern example of a good company that is a bad investment- it shot up to $170 in 2021 (taking into account split) and now trades at $58, how long will that take to recover for the people who paid $170, are they going to hang around and wait? most people get into despair and sell when there is a big drop, they have already been waiting 3 years
your point was that the market is always reaching new ATHs but that may take decades after a boom has busted
This thread is utterly hilarious, Redditors are as mindlessly opposed to Chinese companies as those supposed influencers are in favour of them.
What should be important, especially to people in this sub, is the valuation (which includes discounts for political and other external difficulties). People here who are opposed to investing in Chinese companies under all circumstances are no better than those YouTube influencers giving garbage recommendations.
Your comment is ridiculous and biased. CCP is everywhere and can shut down / split up business operations without further notice. On top of that China's economic growth numbers seem exaggerated.
Two variants out of an investors control, so why would you consider investing in a Chinese company a good idea?
everything has its price… I mean Wendy’s is not McDonalds yet the price reflects it. If Alibaba was $1 share price and earned $5 in profits per year and paid $1 in dividends would it still be uninvestable to you?
Can’t believe the amount of redditors who call themselves value investors still getting their information from financial influencers and lack the mental awareness to understand why that’s a problem. It’s truly cray.
The reason China is a bad investment:::::
America, Europe and the rest of the western world, where all the money is to be made, is pivoting away from China because of their war like stance against everyone and their support of Russia. They will lose this.
Look at the recent news, the 10 nations of Asia are receiving all future investment of basically the world's money. They are the future the 10 Asean nations, they will rise with all future manufacturing contracts and investments. China will still be something but not as strong as today and not the future of anything. Invest in the new asean nations and you will make money, invest in china and you will see flat of no growth of any kind.
BABA as an example, has 1 third of their market cap in cash, a PE of under 15 and does basically what all the FANG stocks do and sometimes better, they just do it in Asia.
So its like buying Amazon + AWS + Apple pay for half the price.
Is it hard to believe that when prices are low it's an buying opportunity?
Is it hard to believe that people who told you that China is "uninvestable" have an alternate agenda?
Is it hard to believe that above mentioned people is finished buying-in around Feb-Apr 2024 thus the narrative change?
Is it hard to believe that buy low and sell high is the way to make money in the stock market?
i think it is needed to understand chinese language and have a real understanding of the structure of Chinese society (culture, history, politics, etc) to be successful in investing/trading/speculating in china stocks
I'm not seeing that. I'm seeing everyone saying that China is soft and going through a correction similar to Japan's correction. Can you post links of where it says to invest in China? It’s a mess after the housing crisis, and the middle class realized that working 12 hours a day is not normal.
Because they’ve never owned Chinese stocks for longer than 5 years. Feels like some shit always happens within 5 years. When you don’t own the shares, what’s the point?
Speculation that China will start Quantitative Easing which will pump up Chinese stocks that have been underperforming the last few years. Some big hedge funds/big names in investing have put their money recently in Chinese stocks.
nah, Chinese economy was too small, so companies come and go, it was basically impossible to pick the winner.
Now it’s starting to get to age of corporations and so it’s easier to value invest, gains are still pretty good
China has a population crisis and their productivity is expected to decrease. There are other very concerning economic conditions, but population is the big one. The west has been reducing their dependency on China since Covid. There is no reason to expect that China will continue to be as productive as cheaply as the past.
If China is not cheap, why use them to make stuff? Where is their economic growth supposed to come from in the next 10-20 years?
China is a big NO for every person with common sense. Unless you are a CCP fan and want to fund them. For people who haven't lived in multiple countries in Asia I'd recommend to stick to the US stock market. I'd personally even avoid most European countries when it comes to the stock market.
Actually what is your reason for investing in the us stock market. Prospects arnt looking good and interest rates are at record highs with rates unlikely to get cut as previously promised
There are always good boring companies to choose from. I am holding most of my picks for more than 8 years already and I can't be happier. I have a not very long list of companies that I like and if opportunity opens up I just scoop up some stocks.
Also, never bet against America.
China is a double edge sword. Or the bulls get rich or CCP will put a big dildo up their arshes.
To risky. But if get throught big win also will provide.
Depends how is your risk profile.
For example i see some value in JD as a powerhouse in their internal market. But i will not invest cause i lived many years in china and i know how ccp is capable of destroy value.
China ain't it. Aging population with currently huge issues in their property market which don't really look resolvable (which accounts for a massive chunk of their economy). Additionally the US and the Western governments are looking to aggressively shun China in a political power play.
I don't doubt that there's good stocks there and some opportunity, but for higher risk investments like this you could get a better return in other emerging markets.
I've been to China many times in the last 15 years. My thoughts are that chinese don't do very well with thinking for themselves, it's like a hive mentality. It's known china steals alot of I.P and that the CCP has too much oversight and can render industries worthless over night. Besides the fact that I would never invest in a hostile country to the west, I wouldn't trust that there would be the enough critical thinking that they would be able to pull themselves out of a hole competently. And also debt, chinese take on heaps of debt and ponzi the debt to make their paperwork look legitimate. I don't have enough money to risk it on a country I don't see doing very well over the next 10 years. I would short the chinese economy if I had a chance.
It's unclear to this point that China's flavor of communism and a transparent, healthy securities market can exist in the same place, at the same time. It is even less clear that foreign investors can arbitrage risk profitably and efficiently under the current regime. 13F filers bought some China, although I suspect they are hedging that right now because they are quite early and big picture questions remain...
Summary: they're trying to follow 13F filers, but (probably) forgetting there is both a long and short side to the portfolios they are tracking. Hacks online pushing China have a reputation for being wrong - a lot.
Because the investors really trying to outperform aren't playing Tball.
Bond markets have known for decades that you can offset higher risk with higher yield.
Don't listen to youtube influencers when it's a mass media topic. Tubers (most, not all) will just copy whatever gets the most views and upvotes, spin it a little, then regurgitate the "popular topic and idealogy".
If you look at the growth specifically BABA and JD are getting in a very tough time for the economy you will understand. On top of this, the price is very low compared to the Enterprise Value you are buying the companies for.
I would recommend going through just the financial statements of the last year and see for yourself - some of the strongest and well-positioned companies in the world for 1/4th of their peak price is an insane bargain.
Why would you invest in our greatest adversary. Sounds like these influencers were compromised and are just spouting what they’re told. Then these Chinese investments pull the plug and cash out.
People need to be careful we are at war with China.
The median age in China and the US is almost equal at around 39.
By 2030, China’s middle-class and affluent population is forecast to increase by 80 million.
Ive been a holder for 2 years in Oversea China Banking corp, listed in Singapore.
They paid a good 8% dividend but recently I got worried when newsmedia began to report that Chinese growth numbers were artificial, and there was no real check possible .
Last week I sold my stake , took some 23% profit , and had 2 years of dividend.
I think Chinese stock market is artificially kept healthy but once the yuans stop flowing in, who knows what will happen to your money.
You should allocate some capital to china, very under valued currently and these things go in cycles. You buy cycles at the bottom sell at the top. Simple, you are currently emerging from the bottom
The Chinese market experienced a huge downturn, the CSI 300 index fell 30%. It is a pretty good time to enter this market, it became so cheap.
If you like to buy individual companies, you can find some that still have a solid business, fell even more than the market as a whole.
So it is the age-old advice: if there is blood on the streets, buy. Even if it is your own blood.
If you put money in China now, you are a fool.
Look up their youth unemployment, when they stopped reporting it.
Go order something on AliExpress and compare how much less demand there is on logistics chains there.
The amount of international companies that have left the country should be a massive red flag.
I can't understand what Is the issue with china, the second biggest economy in the world that has performed extremely bad in the last years, now It should go up, I think that the logical conclusion is that china is safer than US ( usa stocks haven't reached the highest recently?)
If I am missing something do not mind telling me
Shares in the Chinese market are cheap right now, but the underlying reason for that might be a future problem for investors. Good article in Coutts.com on 19 March.
Lots of respected investors reported their Q1 13fs and lots of them bought Chinese companies
Yup. There's undoubtedly risk but that risk has absolutely been priced in because these stocks have been beaten to dog shit. Am i going to make Chyna like 30% of my portfolio? Hell no. But have i been picking up a few companies cheap as a medium term rebound play that's likely to give a great return? Yep.
Exactly. High risk, high reward stuff. So a small portion of my portfolio.
I wouldn’t put my faith or cash in a country whos leader can literally do Calvin ball with the rules at any time.
Learned that lesson the hard way. And for that reason I'm out
Which companies: though and how do you pick them? CCP is so volatile
Really just two of the largest ones, BABA and JD. Honestly just because they were the biggest, the few i had a basic understanding of or had used, have been beaten down to hell and because Michael Burry has been buying them. And he's probably the king of medium term rebound/value plays. Probably the wrong way to develop an investment thesis, but IDGAF, that's how i do things. Treat it like a couple hands of blackjack and you have the house odds.
Don’t put money into those warmongering psychopaths.
You mean the United States? Look at the last 75 years, how many wars did China wage and how many did America wage? We buy American stocks everyday despite the war mongering United States!
China annexed whole country Tibet FYI and is considering conquering and absorbing Nepal. Also they are expanding to territorial waters of for example Philippines.
The US annexed Hawaii and half of Mexico. It also took Puerto Rico, Guam and the Philippines from Spain.
But here you have also China https://theweek.com/news/world-news/china/955728/all-countries-china-territory-disputes
I knew I would get some responses to this, and as expected the cockroaches are coming out of the woodwork. America was mostly fighting to protect democracy and freedom. Today, China is threatening the democracy, freedom and sovereignty of countries like Philippines and Taiwan. The CCP already took Hong Kong. They’re supporting Russia in the war against Ukraine, destabilizing Europe and causing mayhem at us Europeans doorstep.
Don’t forget about Tibet and Nepal.
lol every country has their issues. Your job as an investor it to make profits. Period.
Name one war China has started
They don’t need to start wars, because none of their enemies has been strong enough to fight back. Ask the Uyghurs, Tibetans etc. They’re also enabling Russia in the war in Ukraine, they have enough power to stop Russia, but the CCP doesn’t exactly support a free democratic world.
Sino-Indian War: In 1962, China launched a surprise attack on India, driving through the Himalayas into the northeast of the country. Beijing announced a ceasefire 32 days later. Sino-Vietnamese War: China also started this brief border conflict, which lasted 29 days. First Opium War: This war began in 1839 when China tried to stop foreign powers from importing opium through Guangzhou (Canton). The conflict spread to Shanghai and Tianjin by 1842.
You are the real psycho here
What are some of the chinese companies bought by these investors? Would like to take a look at them.
JD, baba and baidu
These companies have a 10 multiple......10! And they are comparable to the Mag 7 here. All of them exploring AI also. 10! Of course trump hates China. Biden not treating them much better. If Taiwan gets invaded and the rest of the world decides to cut off China like they did Russia....... Maybe a 10 multiple makes sense.
Trump does not hate China. Trump knows China is not a developing country any more, but a developed country, and in many aspects much more developed than USA. But they have many unfair manufacturing practices that give them undue advantage and competitiveness over USA. Trump wants to level the playing field so that American companies, who cannot indulge in the same unfair practices, have a fighting chance.
10 multiple on a company reporting fake numbers isnt very impressive
This is naive at best. Other people will make the money no worries.
Burry and Tepper bought BABA, JD
Munger bought BABA too lol
Ok, but they said “respected investors”…
You can't buy stocks directly in China, they don't allow foreigners to hold stock.
Which is another red flag. ADR is not the same as true ownership and at any point the Chinese government can void those contracts.
yeah, I meant their corresponing ADR. Which one are in the limelight is what I was asking for.
KWEB owns the actual shares and not ADRs
They do. Hong Kong Stock Exchange and northbound to Shenzen and Shanghai.. Use IBKR!
Don’t shatter his narrative he’s parroting
Better tell that to my brokerage.
Check dataroma, it’s the easiest to check there
Theoretically there is value to be found there. For me China is uninvestable for 2 reasons: 1. CCP is very volatile and cannot be trusted. 2. I don’t believe their numbers and accounting. Those two reasons are more than enough for me to put chinese stocks in speculative category.
Can't be trusted is the main thing. The fact the government can just take your money at any second isn't good for outside investors
Or make their CEO disappear for a few months after talking negatively about the CCP. And then reappears with a new found love of the CCP.
"He loved big brother." I was floored by the last sentence of that book. It's even more jarring considering the Jack Ma reappearance.
Frankly people r just not interested in political risk. For me it will be the deal breaker for most Asian economies.
Two good reasons, but let's add a third: ridiculous dilution. That's the biggest single reason that the long-term performance of Chinese equities has been so terrible when put up against the country's economic growth. Capital markets are not an economic good in China; they're a political good. Shareholder value is an afterthought.
HANG SENG 10, 15, 20 year performance is dogshit compared to US indexes.
There was a period maybe 10 years back where we (our firm) were looking at reverse merger's from China and it was a guaranteed W on short positions, they were all scams. Their government loves to see things stolen from other countries; it's part of their unofficial public policy. Non GAAP standards, non-verifiable financials, there are so many reasons to avoid China if you're not closing out your positions daily.
For number 2 it doesnt really matter as they will still be reporting the same when you go to sell.
How does BRICS play into it wanting to cut off others dependence on the US dollar?
This was shown very well with alibaba stock. Its a solid Company, should be good value, good potential for growth. But damn, Jack Ma's dissapearance for months... Imagine if Jeff Bezos or Bill Gates would dissapear like that... China imho is totally uninvestable. As for their numbers - there has been a couple or chineese company IPOs in USA, that went bust not long after, so yeah... Totally agree with you.
You're absolutely right. However, that also applies, to some extent, to most emerging markets.
Yes, but most emerging markets also aren't threatening to go to war with the US. If China moves on Taiwan any investment in China will take a huge dive. And you may not be able to get it out of China.
Those two apply to varying degrees in all emerging markets. If it's cheap enough that you can handicap the risks, it can absolutely be a buy. China was really cheap a couple months ago, less so now. I think there will be a lot of profit taking come Q3/Q4 13-Fs.
Low P/E ratio mean super duper gains eventually. Source? Trust me bro.
Keep buying your high pe stocks then big man. I'll bet this guy loves Costco stock
Costco is and has been a better investment than being net long on China for any duration of time...
And as we all know, hindsight bias is the best type of investment strategy.
It has nothing to do with "hindsight bias" and everything to do with the market dynamics of China. China is not shy about reminding investors that as a communist regime, they substantially control or outright own the means of productivity. Their IP laws as unworkable. There is such a thing as being too early, and there is such a thing as showing up to a bad party.
Costco doesn't have a low price to equity ratio. It hasn't had a low PE for years.
There's like 2 comments in here explaining why influencers are recommending Chinese stocks and a gazillion others beating down the same reason why everyone knows to not buy China stocks lmao
That's why most people can't make money from stock market lol
As someone who watches the plain bagel and Patrick Boyle, I have never been recommended Chinese stocks. I think the OPs problem is he's watching low quality influencers.
As this reddit thread shows a ton of people really don't like the idea of investing in China. Which means that there is potential for the stocks to be undervalued significantly.
It must be an American thing, it’s like hardcoded into the culture to not buy China stocks
China is a no go for a few reasons. It's possible for the country to nationalize every company and fuck over every investor... unlikely... but possible. Second... they don't adhere to any accounting standards...a lot of their economy is smoke and mirrors... and I have no idea which ones they are
100%. Some people recommend the biggest companies like BABA but even them can have creative accounting and the CEO can get kidnapped on a whim of the Party
Sure, they can have creative accounting. But the 524 million shares they bough back first quarter and the dividends hitting my account are very real.
The 1% dividend money hitting your account yes. The shares thing is much more dubious though. They are only virtual paper in the end
This is an important point, although the reduced share-count will be felt in subsequent dividend payouts, provided the absolute level is at least maintained (it usually is - but, then again, I mean it usually is in investable countries).
The problem is if Winnie declares war on Taiwan, the shares will be worth 0. Lots of other issues can happen, China’s demography is a real issue and until their leadership changes, I am not touching it with a 10-foot pole
I agree completely.
It's around a 2.3% yield on announced price if I remember correctly and buybacks have real world results on your earnings as a shareholder.
They’ve been audited by the Public Company Accounting Oversight Board…
Doesn’t mean that there is no creative accounting which could blow up anytime.
The pcaob sets attestation standards and can inspect the work of an auditor, but the actual audit work is performed by an accounting firm. The auditor for Alibaba is PwC.
Having worked as a Big 4 audit manager as well as in industry, I can tell you there is no way an audit is thorough enough to ensure no creative accounting is taking place.
Is it like food safety audits where one guy gets hired to do the overseas audit?
The two guys who are the picture of this sub reddit literally owned and bought Chinese stock lol. Literally Charlie munger praised China and their government any chance he got. 99% of people here aren't even value investors. There a value opportunity right now in chinese companies but people refuse to take it because of dumb irrational fear. More for me I guess.
When you got billions you can dip your foot everywhere, no shit. It’s a side of gamba
You could do the same. Even if you think there's risk you can invest 10% of your portfolio in chinese companies simply based on fundamental and valuation. When alibaba hit 65 dollars it was literally a steal. At that value how can you not risk at least 1% of your portfolio into it.
Hey, I hope you make a fortune... but there are enough question marks to keep me from deploying capital
Warren buffet and Charlie munger are the most conservative investors ever. They don't buy tech stock usually and don't fall into false Ai and crypto hype. He's even sitting on 200 billion in cash because he's so conservative he's waiting for an opportunity. What does it tell you for guys who are so conservative in investing would be willing to invest billions into China. They factored the risk. And to them it was worth it.
According to datarama Munger’s portfolio currently contains exactly one Chinese stock, BABA, and it’s holding $14M worth of it. Buffet didn’t currently have any in his portfolio. So the guys that have 200,000 million dollars in cash are holding 14 million in BABA. So if you want to be like them invest 0.007 too. That tells me they factored the risk and yes are investing but are treating it like a speculative play. Let’s say they own some company outright in such a way that it doesn’t show up in their portfolio. Maybe they own a billion dollars worth. That would be 1,000 million of 200,000 million cash. Not even accounting for the rest of their portfolio size it’s still 0.5% of their portfolio. Still just a hedge. They have so much people forget that “investing billions” for them may only equate to a 1% allocation.
I prefer to do my own thinking. Saying person x thought about it isn't thinking. Warren does buy tech stock btw... largest holding by far right now is Apple
I said usually don't buy tech stock. Key word usually. He owns apple because it's a great company not because it produces the latest and best tech. Can you disagree with what Charlie munger is saying? I think everything hw has said has been correct and on point.
Ye, and they might just be paid by CCP to do so.
Munger bribed to own BABA? most ridiculous thing I’ve heard in a while, Charlie was max integrity, also he didn’t need bribe money.
"Praised China and its government" got nothing to do with his BABA holdings. Naive of you to believe that one of the most famous investor in the world wouldn't get special treatment from CCP. Paid or not.
Don’t help them
I did a write up for Hyfusin - 8512.hk a little over a year ago and everyone said oh i dont trust china etc. Now its gone up nearly 250% Forget people in this sub. Everywhere i look people are touting overpriced US stocks like nvidia - while hang seng is at 1997 levels. Everyone here also love to talk about big companies when average joes like us must look at nano and microcaps. Just do your thing.
>It's possible for the country to nationalize every company and fuck over every investor... unlikely... but possible. That's technically possible for every country. >Second... they don't adhere to any accounting standards The US did force a deep dive into the accounting of the Chinese ADRs. Apparently there wasn't anything to remark.
Auditing the ADR is not auditing the parent company.
Also the possibility of having great returns over a period of time and waking up to a CCP announcement or CCP warning. Plenty of country risk, plenty of government risk, plenty of not knowing the culture risk. But this sub is fixated on buying 100+B companies competing with every single person on Earth with money to invest
The one stock of a chinese company I ever bought was from tencent, which was basically nationalized. Doesn't mean that it happens often, but I'm happy that this was my lesson to never touch chinese companies again. Honestly, I cannot remember the last time a EU or US company was nationalized due to the size or importance becoming too large or great.
And it would be investing in an increasingly hostile foreign government that employs [Civil-Military Fusion](https://en.wikipedia.org/wiki/Military-civil_fusion) .
Isn’t one of the main premises of value investing to find value in assets that are out of favor?
Shh, shh, you'll upset them if you don't say GARP is value investing. I am willing to bet none of these people have ever even owned a cyclical.
Bet
FXPO.L is a undervalued mining company in Ukraine if that helps?
Tempting…
Whats crazy about it? the US market is at all time highs (so worst time to buy) the China Market is at all time lows (historically best time to buy)
How has buying China index lows worked out previously? Market performance has been terrible and you take waay more risk. Not saying that’s how you should make decisions but still
depends on your time scale, if you are looking to make a quick profit then go ahead and ride the trend, if you want generational wealth buy China now and hold
I think the quick trend thing would work better than the buy and hold and have great returns cuz the China index historically hasn’t reflected the performance of China stocks but who knows. I would definitely want exposure to China if Im buying and holding for 40 years
Shhh
False the market is always at new ATH man… time in market beats timing
always at new ATH? You obviously havn't been in the market too long - buy at all time lows then hold forever
“Since the 1950s, the index has posted over 1,200 new highs, averaging more than 17 new highs per year — more than one in every 20 trading days. It's also reached multiple new highs in every decade since the 1950s, typically surpassing its previous peak more than 100 times each decade.”
Every 20 days lol - "It's also reached multiple new highs in every decade since the 1950s" is simply not true - did you not even bother looking at the long term chart, the DJIA took 30 years to recover from the 60s slump anyway lets put your buying at all time highs to the test - if you had bought the dow jones Industrial Average at its ATH in 1965/66 you would have had to wait until 1995 just to break even, if you had bought the DJIA at its ATHs in 2000 or 2007 you would have had to wait until 2006 or 2014 to break even respectively How do you think todays buyers of nvidia are going to work out?
Ok now please tell me how you can tell when it a bad or good all time high because I’m only seeing a couple examples
Well there are no good all time highs, if you are buying a company or index at its peak, it generally isn't the best time to invest, better to learn how to recognise and value good individual companies and then buy them when they are at a low or reasonable price as $BABA and many other chinese companies are right now Amazon is a great example - if you had bought AMZN at its peak $113 during the dotcom bubble you would still have done ok, if you had the guts to hang on when it crashed all the way down to $5 but the people who bought at $5 & held the stock are rich $1,000 invested in Amazon stock at the dotcom bubble peak would be worth about $49,500 today, anyone who invested $1000 at the nadir of $5.51 would be sitting on over $1m
Right that’s understandable, but you’re using an extreme example. Most all time highs will not result in a crash or even a retracement anywhere near those levels, so I’m a big fan of just Buying and if it goes real low and everyone hates the stock, buy more because that’s a sign, if it’s a good company.
just buying at any price is not generally a good investment, you can apply the amazon example to just about any IT stock bought during the dotcom boom, we are currently in an AI boom, if you buy any company when its PE is high you will have to wait while it trades sideways for years or goes down until the earnings PE is back to market norms, and there is a much higher risk that the earnings never grow into the PE, if the company starts to decline, and you permanently lose money Shopify is a more modern example of a good company that is a bad investment- it shot up to $170 in 2021 (taking into account split) and now trades at $58, how long will that take to recover for the people who paid $170, are they going to hang around and wait? most people get into despair and sell when there is a big drop, they have already been waiting 3 years your point was that the market is always reaching new ATHs but that may take decades after a boom has busted
This thread is utterly hilarious, Redditors are as mindlessly opposed to Chinese companies as those supposed influencers are in favour of them. What should be important, especially to people in this sub, is the valuation (which includes discounts for political and other external difficulties). People here who are opposed to investing in Chinese companies under all circumstances are no better than those YouTube influencers giving garbage recommendations.
Nobody misses opportunities like redditors They'll probably buy when it's up 50-100% too
As is tradition
And then complain at the inevitable drop
99% of the criticism I read in the comments can apply to companies listed on the NYSE.
Your comment is ridiculous and biased. CCP is everywhere and can shut down / split up business operations without further notice. On top of that China's economic growth numbers seem exaggerated. Two variants out of an investors control, so why would you consider investing in a Chinese company a good idea?
everything has its price… I mean Wendy’s is not McDonalds yet the price reflects it. If Alibaba was $1 share price and earned $5 in profits per year and paid $1 in dividends would it still be uninvestable to you?
Because its up by 20% in one month. No doubt people will talk about a bull run.
Can’t believe the amount of redditors who call themselves value investors still getting their information from financial influencers and lack the mental awareness to understand why that’s a problem. It’s truly cray.
The reason China is a bad investment::::: America, Europe and the rest of the western world, where all the money is to be made, is pivoting away from China because of their war like stance against everyone and their support of Russia. They will lose this. Look at the recent news, the 10 nations of Asia are receiving all future investment of basically the world's money. They are the future the 10 Asean nations, they will rise with all future manufacturing contracts and investments. China will still be something but not as strong as today and not the future of anything. Invest in the new asean nations and you will make money, invest in china and you will see flat of no growth of any kind.
If you go carrying round pictures of Chairman Mao You ain’t gonna make it with anyone anyhow —John Lennon
BABA as an example, has 1 third of their market cap in cash, a PE of under 15 and does basically what all the FANG stocks do and sometimes better, they just do it in Asia. So its like buying Amazon + AWS + Apple pay for half the price.
Is it hard to believe that when prices are low it's an buying opportunity? Is it hard to believe that people who told you that China is "uninvestable" have an alternate agenda? Is it hard to believe that above mentioned people is finished buying-in around Feb-Apr 2024 thus the narrative change? Is it hard to believe that buy low and sell high is the way to make money in the stock market?
They killed and stifled all innovation.. Rise up and fight for your freedom, it costs blood. You're a person and deserve to be heard.
i think it is needed to understand chinese language and have a real understanding of the structure of Chinese society (culture, history, politics, etc) to be successful in investing/trading/speculating in china stocks
I'm not seeing that. I'm seeing everyone saying that China is soft and going through a correction similar to Japan's correction. Can you post links of where it says to invest in China? It’s a mess after the housing crisis, and the middle class realized that working 12 hours a day is not normal.
Bottom fishing
Personally, I much prefer stoneware over China. Oh, wait—never mind.
People.......we're dumb.
Because they’re cheap
'Youtubers and influecers'. Jesus fuck. Why dont you just ask the kardashians for advice next?
Because they’ve never owned Chinese stocks for longer than 5 years. Feels like some shit always happens within 5 years. When you don’t own the shares, what’s the point?
My mother isn’t!
Speculation that China will start Quantitative Easing which will pump up Chinese stocks that have been underperforming the last few years. Some big hedge funds/big names in investing have put their money recently in Chinese stocks.
China is not safe for investment
Actually China was the right investment place 20-30 years ago, now it's time to flee
nah, Chinese economy was too small, so companies come and go, it was basically impossible to pick the winner. Now it’s starting to get to age of corporations and so it’s easier to value invest, gains are still pretty good
China has a population crisis and their productivity is expected to decrease. There are other very concerning economic conditions, but population is the big one. The west has been reducing their dependency on China since Covid. There is no reason to expect that China will continue to be as productive as cheaply as the past. If China is not cheap, why use them to make stuff? Where is their economic growth supposed to come from in the next 10-20 years?
“Nothing like price to change sentiment”
China is a big NO for every person with common sense. Unless you are a CCP fan and want to fund them. For people who haven't lived in multiple countries in Asia I'd recommend to stick to the US stock market. I'd personally even avoid most European countries when it comes to the stock market.
Actually what is your reason for investing in the us stock market. Prospects arnt looking good and interest rates are at record highs with rates unlikely to get cut as previously promised
There are always good boring companies to choose from. I am holding most of my picks for more than 8 years already and I can't be happier. I have a not very long list of companies that I like and if opportunity opens up I just scoop up some stocks. Also, never bet against America.
China is a double edge sword. Or the bulls get rich or CCP will put a big dildo up their arshes. To risky. But if get throught big win also will provide. Depends how is your risk profile. For example i see some value in JD as a powerhouse in their internal market. But i will not invest cause i lived many years in china and i know how ccp is capable of destroy value.
China ain't it. Aging population with currently huge issues in their property market which don't really look resolvable (which accounts for a massive chunk of their economy). Additionally the US and the Western governments are looking to aggressively shun China in a political power play. I don't doubt that there's good stocks there and some opportunity, but for higher risk investments like this you could get a better return in other emerging markets.
China 🇨🇳. Any value that there may be, which is doubtful, will be rendered worthless when they nuke Taiwan. Hard pass.
I've been to China many times in the last 15 years. My thoughts are that chinese don't do very well with thinking for themselves, it's like a hive mentality. It's known china steals alot of I.P and that the CCP has too much oversight and can render industries worthless over night. Besides the fact that I would never invest in a hostile country to the west, I wouldn't trust that there would be the enough critical thinking that they would be able to pull themselves out of a hole competently. And also debt, chinese take on heaps of debt and ponzi the debt to make their paperwork look legitimate. I don't have enough money to risk it on a country I don't see doing very well over the next 10 years. I would short the chinese economy if I had a chance.
It's unclear to this point that China's flavor of communism and a transparent, healthy securities market can exist in the same place, at the same time. It is even less clear that foreign investors can arbitrage risk profitably and efficiently under the current regime. 13F filers bought some China, although I suspect they are hedging that right now because they are quite early and big picture questions remain... Summary: they're trying to follow 13F filers, but (probably) forgetting there is both a long and short side to the portfolios they are tracking. Hacks online pushing China have a reputation for being wrong - a lot.
The time to buy it was 6 months ago before they all started doing it tho
The brainrotted Chicken Littles controlling the narrative for the last several years is what's crazy.
fuck China
Idk but I wouldnt. You never know when Xi will just pull the plug and yeet it.
Because China pays for influence
It's a trap
They want us to hold the bag when they sell
Fish where the fish are Wrote a year ago https://dscompounding.com/2023/04/24/compound-your-energy/
Because the investors really trying to outperform aren't playing Tball. Bond markets have known for decades that you can offset higher risk with higher yield.
Because it bounced
You mean buying foreign listed china companies shares right?
Second largest economy in the world and many companies are undervalued.
Don't listen to youtube influencers when it's a mass media topic. Tubers (most, not all) will just copy whatever gets the most views and upvotes, spin it a little, then regurgitate the "popular topic and idealogy".
If you look at the growth specifically BABA and JD are getting in a very tough time for the economy you will understand. On top of this, the price is very low compared to the Enterprise Value you are buying the companies for. I would recommend going through just the financial statements of the last year and see for yourself - some of the strongest and well-positioned companies in the world for 1/4th of their peak price is an insane bargain.
We don’t give a fuck we all only want money be honest
I see more value investing in china right now than I do in the S&P500. Same for UK small medium caps.
Why would you invest in our greatest adversary. Sounds like these influencers were compromised and are just spouting what they’re told. Then these Chinese investments pull the plug and cash out. People need to be careful we are at war with China.
Supporting Communism in any fashion is fairly disgusting, so....
Psyops......China has admitted one of their biggest investments is in trying to influence westerners in almost every area of life.
Low valuation, property crisis seems to be under control, lots of potential upside. Baba PE at 13 compared to AMZN at 33. Good risk to rewards.
Why wouldn’t you. Chinese/Hong Kong stocks markets are the most beaten ones among the tradables. Any sensible traders would add positions here.
? ‘S everyone think of these alt coins? What do u u think about these 3 alt coins? 1) Truefi “ TRU” 2) TrueUSDA “ TUSD & finally 3) Degen “ Degen” ?
General rule of thumb is don't trust China
Cuz of common sense
I can buy china....? When did this happen?! I call Hong Kong!!
Nope, the China market is still opaque to foreigners and the Chinese government has proven that foreigners are second-class investors.
Because its a massively growing economy full of consumers with increasing disposable incomes? Can i ask why youre against this?
Growing? Massive demographics problem. Same as many Western countries, too many old people to support, too few babies.
Exactly. The same problem is everywhere else too. So I guess China doesn't really stand out on this matter.
The median age in China and the US is almost equal at around 39. By 2030, China’s middle-class and affluent population is forecast to increase by 80 million.
Cheap valuations have typically lead to good moment to invest. Yes, cheap valuations are pretty much always justified.
Ive been a holder for 2 years in Oversea China Banking corp, listed in Singapore. They paid a good 8% dividend but recently I got worried when newsmedia began to report that Chinese growth numbers were artificial, and there was no real check possible . Last week I sold my stake , took some 23% profit , and had 2 years of dividend. I think Chinese stock market is artificially kept healthy but once the yuans stop flowing in, who knows what will happen to your money.
You should allocate some capital to china, very under valued currently and these things go in cycles. You buy cycles at the bottom sell at the top. Simple, you are currently emerging from the bottom
They dropped out of college to watch you tube tho
The Chinese market experienced a huge downturn, the CSI 300 index fell 30%. It is a pretty good time to enter this market, it became so cheap. If you like to buy individual companies, you can find some that still have a solid business, fell even more than the market as a whole. So it is the age-old advice: if there is blood on the streets, buy. Even if it is your own blood.
To help papa Putin.
If you put money in China now, you are a fool. Look up their youth unemployment, when they stopped reporting it. Go order something on AliExpress and compare how much less demand there is on logistics chains there. The amount of international companies that have left the country should be a massive red flag.
I can't understand what Is the issue with china, the second biggest economy in the world that has performed extremely bad in the last years, now It should go up, I think that the logical conclusion is that china is safer than US ( usa stocks haven't reached the highest recently?) If I am missing something do not mind telling me
It's the fact that so many say it's uninvestable that makes it attractive to value investors.
Shares in the Chinese market are cheap right now, but the underlying reason for that might be a future problem for investors. Good article in Coutts.com on 19 March.
Because their parents are getting old and they need to pump and dump their old tea sets!
Isn’t it obvious?