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Time to Double Up on China.
Three weeks ago, I posted an extensive piece on my evening with the Chinese Intelligence Service, concluding that it was time to get back into the Middle Kingdom (click here for the piece at http://www.madhedgefundtrader.com/september-28-2010.html ).
It proved to be a timely call, as QEII has since gone global, taking the Shanghai index up 17% since then, the move this week being particularly explosive. We have blasted through the 200 day moving average, suggesting that this move may have the legs of Secretariat.
I really like the idea of increasing my weighting in China here. Both the Chinese, and the many trading partners I talk to, tell me that things are going well there, that inflation is under control, and rumors of its imminent demise are premature by at least a decade. Jim Chanos, please widen your circle of contacts.
The recent international action has been predominantly in the second tier emerging markets which I have been aggressively pushing, including Indonesia (IDX), Chile (ECH), Thailand (TF), Singapore (EWS), and South Korea (EWY), while the mainline BRIC’s slept. Many of these “emerging, emerging” markets are now up 50% or more on the year.
I can really see cash rotating out of these virile, young sprinters back into the established BRIC long distance runners as a great risk control measure. That way, if you get a sudden risk reversal, and markets can turn on a dime these days, your downside will be much less.
With Ben Bernanke fitting both turbochargers and superchargers to the printing presses in Washington as I write this, I am loathe to tell anyone to sell anything, even their Beenie Baby collection.
So use any new cash inflows from new and existing clients to add to positions on dips not only China (FXI), but Brazil (EWZ), India (PIN), and Russia (RSX) as well. If you have been following the advice of this letter all year, you should have new cash pouring in through the transom.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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I wonder if MHFT has ever had lunch with Leo Kalivakis...?
... put any sort of bilge on ZH these days ...
Do you really think we are that stupid to buy such crap?
You sound so much like the bozo Bob Pasani and the clueless perma-cheerleader Jim Cramer.
go for it big guy
why not pick up a few unfinished units in a remote condo tower 50 miles from the city for $1.3 million each? buy 10! buy 20! you know it will end well for you.
Yeah, well, maybe, but I think I will just stick with gold.
Selective memory on the p&l there.
Asia is high risk. One wrong move and the hot money will stampede out of there- just like every other emerging market decoupling myth in the last 20-30 years.
Now that is a fuckin bubble. A bunch of central planners telling the world that they greew10% is like MBS mother fuckin salesmen saying houses will never go down.
What the hell happened to the world that we believe fuckin commies over real data.
Jesus bring on the matrix and wipe these fuckers.
I'm.. Im I'm going postal..................................
Already tripled down on Chinese solar positions when they were hovering around $5!
That's so Leo :)
There you go again talking your Chinese solar book ;-)
Perhaps the MHFT means 6 months to a year when he says a decade ... or at least that should be how his book is positioned.
The gains in peripheral EMs this year are parabolic. So if this critter is still whipped up by QE and the flood of liquidity then yes you probably will see a rotation. Hong Kong has been on fire on a price basis and the FXI is 60% Hang Seng at any rate ... If Chinese authorities try to preempt inflationary excess, real savings rates remain negative. If it is harder to buy real estate, it becomes more compelling to buy stocks in Shanghai ...
But of course, always have an exit strategy and discipline.
Both the Chinese, and the many trading partners I talk to, tell me that things are going well there, that inflation is under control, and rumors of its imminent demise are premature by at least a decade.
-------------------------------------------------------
In 1989, people were talking about Japan. If you had talked to both the Japanese, and the many trading partners, they would have told you that things were going well there, that inflation was under control, and rumors of its imminent demise were premature by at least a decade. But we know what happened 2 years later.
In 2005, people were talking about the US real estate boom. If you had talked to both the Americans, and the many trading partners, they would have told you that things were going well there, that inflation was under control, and rumors of its imminent demise were premature by at least a decade. But we know what happened 2 years later.
Now people are talking about China...
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That's it. I'm not reading your shit ever again.
"We have blasted through the 200 day moving average, suggesting that this move may have the legs of Secretariat."
"trading partners I talk to, tell me that things are going well there, that inflation is under control, and rumors of its imminent demise are premature by at least a decade"
"I am loathe to tell anyone to sell anything, even their Beenie Baby collection."
My experience out here tells me that these kinds of statements are markers for caution. I know a fellow who manages an electronics component plant over in Shenzen. He just keeps complaining to me about how his margins are hyper squeezed and his workers are getting belligerent.
I could be wrong but then again...hmmmm...
Jesus Christ, its like a goldfish on crack.
Put some money in China by all means but not in ETFs fir chrissakes, thats just clambering into the wagon and holding onto the coatails of the guy in the herd that went in front.
China is not "hot" but it's progress is inevitable. put your money in sleep tight stocks and walk away for a good long few years. Dont touch retailers, technology or anything in property. Booze, noodles and fags is my bet.
Someone help me believe that Cramer, uhh... Madhedgefundtrader is joking.
Empty cities and new shopping malls, 64 million unoccupied and unaffordable apartments--yep, everything should be fine for decades all right.
He had lunch with Robert Reich one time. Robert Reich has a PHD and teaches Keynesian economics at Berkeley.
So yes...he's joking...LOL.
Helllllllllloooooooooooo madhedgefundtrader, a big BoooYah from da Middle Kingdom!
OK, lost all respect for you again. But I have a solution for that... just not read any of your trash.
So you bought the shit your friends are selling because you "talked to them" good work douche. Maybe the idea of developing RE so people can buy vacant condos that are not affordable except to a few is not really sustainable GDP. This is G20 noise tool.
poor dumbhedge when will ye learn
Buy China! It's getting away! DO NOT, I repeat, do not ring the cash register into price strength, but chase that price with leverage. Bwahahahaha, that's the sound of the banksters whipping up volatility and setting your position on fire, as the feedback loop of triggered stops blows the circuit breakers.
http://finviz.com/quote.ashx?t=fxi
whoever junked you is a fool, that chart says it all. These ETF's are just honey pots to trap foolish retail investors. Unless you are a day trader you have no business anywhere near these products. (even then i would stay away)
That Chart of FXI is very telling, even though China grows at 10% GDP that stock is up and down every two months, it is clearly HFT bait. Save your money and let the computers fight it out there is no way the average investor has a chance in these products.
Too much money sloshing around the world
50 billion $ in 4 days in India for Coal India IPO- more than half of it from Foriegn Institutions[oversubscribed 30 times] while retail subscription just about made it.
Scary yet profitable! We are in interesting times already!