FYI: Value investing is back in China, and stock pickers have Donald Trump to thank.
Renewed trade threats from the U.S. president have jolted Chinese investors awake after a wild three-month party driven by liquidity shots from the central bank. Trading strategies that worked well just a month ago are suddenly losing millions.
Call it a factor reversal. Small is no longer beautiful: Shenzhen’s startup-heavy ChiNext Index has underperformed the Shanghai Beautiful 50 of large-cap stocks by more than 11 percentage points in the past month. Investors are starting to embrace firms with good dividend and earnings yields, having shunned them earlier in the year.
Behind the change of heart is diverging earnings performance within the $6.6 trillion stock market.
Regards,
Ted
https://www.washingtonpost.com/business/value-investing-is-back-in-china-thanks-to-donald-trump/2019/05/07/756938b8-7124-11e9-9331-30bc5836f48e_story.html?utm_term=.67fbd12da6e1
