Grim commentary. Mean reversion as something is fundamentally broken.
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Why not invest in Chinese tech firms. They do not face the debt situation of their index peers. That is why we can focus on hang seng tech etc or bouquet of tech stocks of China.
How do you do that?
Inflows restricted for Hang Seng Tech ETF
Recently I entered and exited that etf. Restriction is on new investments by fund houses. In etf case if there is liquidity it can change hands right.
One of the reasons is the VIE structure. https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2011/10/vie-structure-in-china-faces-scrutiny.pdf
Chinese VIE Structure: Wall Street Continues to Ignore the Risks - GCI Investors
The second issue is already talked about in this thread which is poor accounting standards.
For me, the VIE structure takes away the confidence in buying Chinese stocks.
Also read about the Alibaba Yahoo standoff in 2011
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I donāt think VIE is a real problem. You can look at PPD stock it is up 50 % in the last year. You can look at BYD 4 x in 5 years then you have CNOOC up 60 % in last year with 9 percent yield.
They are undergoing 2008-type shocks due to real estate collapse and also XI erratic purge plus possible war on Taiwan. As stock markets in china are heavily depend upon FIIs market is in total collapse but as described above stock specific things have done well
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If India is a consensus long trade today, China is a consensus short trade. Betting on any consensus trade is a losing strategy in the long run. As a trader & investor, I like to sit on the sidelines watching patiently as consensus trades start getting questioned and momentum starts reversing! Thatās the best time to get in. But of course this is easier said than done.
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This is directed to all forum contributors,
Is Taiwan investible, considering it is trade surplus nation?
What is the general opinion of investing in Japan, considering it has crossed itās multi decadal high?
Is it wise enough to be concentrated in India as India is leading Emerging markets and Investing in India itself can yield better returns that elsewhere?
Diverse opinions are welcome!
Cheers
1/3rd of Japanese population are over 60 years old. Japan has had a birth rate below replacement level for many decades, leading to a shrinking younger population. Japan has a relatively low percentage of immigrants compared to other developed countries. Factors like these have kept me aloof from considering Japan in my radar. I, an outsider, can only take index level bets and canāt do stock picking. Stock pickers can still make hay by making selective allocations to growth sectors.
No. Itās important to diversify with Gold, Bonds and Foreign equity.
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This will help China to secure low cost funding for future growth
Thanks for your insights!
Do you count Taiwan as an investible space?
Taiwan is obviously investible. It depends what are you expectations from this trade.
Just need to understand why Taiwan hasnāt performed historically and what just happened in Jan (around elections) And its more of a macro call so need to completely understand the geopolitics that matter.
Also, if the trade requires me to study macros i would always want to pivot towards a deep value buy vs a momentum buy. So just me. Thus i find China a SIP trade where i donāt expect anything to happen in coming 3Y. Dud money for 3Y at least. Will see what is the IRR after 3-5Y for china. Not tracking PnL for the china trade.
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Hi. Iām considering buying into China market. I followwd through the conversation and couldnāt find a consensus on what is the best way to invest there.
Is it through fofs that are available? Very high expense ratios!!! Didnāt understand why MA china fund is closed when others are open due investment.
Or are there and etf? If yes how to buy them
Is there a simple way to buy direct stocks?
Is it china or one is better invest through Hongkong stock exchange?
Or why not an emerging market fund instead?
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Why is mirae asset tech is closed for SIPs while others are open!
Regards