Comments on: Own China For the Long Term http://www.otcjournal.com/otcb/own-china-for-the-long-term/912/ OTC Journal Blog - Small Cap Review, Hot Stocks, Penny Stock Chaser, Small Cap News Release, College Stock, Free Trade Picks, Forex Info News Thu, 15 Oct 2009 13:20:02 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: missie http://www.otcjournal.com/otcb/own-china-for-the-long-term/912/comment-page-1/#comment-132513 missie Thu, 26 Feb 2009 21:43:27 +0000 http://www.otcjournal.com/otcb/own-china-for-the-long-term/912/#comment-132513 Fxi may fall much more. It's not cheap, trading 11 times suspect earnings. recommend EWH, trading 9 times earnings and 2.27 times book value. <em>Editor: I don't agree that FXI is not cheap, but I do agree it could fall further. EWH (Hong Kong) is cheap too, but doesn't have the upside of FXI as growth opportunities are limited. If it really is 11 times earnings, consider the following. The $600 billion stimulus package is 20% of GDP, and China can write the check. Their is a high savings rate, so know credit melt down or distressed banks. In fact, with the lower interest rates, Chinese banks originated double the loans in Jan of '09 vs '08. 7,000 factory closings are less than 1%. 25 million job losses are the lowest on their food chain- these are the people making $500 per month. Within the portfolio, the lowest growth rate is 10%, but there are a few companies growing at 40% or better with significant earnings. The market is over estimating the effect lower exports have on China, but that's normal for this environment. Long term this is a great hold, but I don't know how low it might go. </em> Fxi may fall much more. It’s not cheap, trading 11 times suspect earnings. recommend EWH, trading 9 times earnings and 2.27 times book value.

Editor: I don’t agree that FXI is not cheap, but I do agree it could fall further. EWH (Hong Kong) is cheap too, but doesn’t have the upside of FXI as growth opportunities are limited. If it really is 11 times earnings, consider the following. The $600 billion stimulus package is 20% of GDP, and China can write the check. Their is a high savings rate, so know credit melt down or distressed banks. In fact, with the lower interest rates, Chinese banks originated double the loans in Jan of ’09 vs ’08. 7,000 factory closings are less than 1%. 25 million job losses are the lowest on their food chain- these are the people making $500 per month. Within the portfolio, the lowest growth rate is 10%, but there are a few companies growing at 40% or better with significant earnings. The market is over estimating the effect lower exports have on China, but that’s normal for this environment. Long term this is a great hold, but I don’t know how low it might go.

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