Is China a bear market opportunity?

johnN

https://www.schwab.com/resource-center/insights/content/is-chinas-bear-market-opportunity?cmp=em-RBK

Is China a bear market opportunity?

Key Points

China’s stock market pullback this year has been in line with the average annual drawdown; historically, this volatility has tended to produce double-digit annualized gains.

The recent drop seems to be driven by a regulatory crackdown, not an economic slowdown, with the market not responding to the economic outlook, but to the policy uncertainty.

Regulatory reform may continue, but the market’s reaction may be overdone.






We have been adding to China funds and EEM past few wks

catch22

We have been adding to China funds

What/which?
Thank you

johnN

Mathews China Fund MCHFX and EEM

Baseball_Fan

Wouldn't send a dime of my hard earned monies over there...I literally and willingly pay double for any product not made there and made in the USA. I don't care what the returns might be and for the record I believe that they will be terrible going forward based on do you really believe any sort of accounting standards they have there and what the Chinese gov't will do...it's all a con game and you might be a a fool if you play along in an attempt to "capitalize on the growing markets over there"...after school tutoring shell companies...sure, those numbers were real....sarcasm...and who in their right mind wants to support a repressive communist government that is building weaponry to potentially be used against our troops and contractors...not me, no thanks.

Good Luck to All,

Baseball Fan

LewisBraham

China is pretty far from a communist government today or really any day in its history, despite its own claims to the contrary. It's more like a totalitarian capitalist one now. Many of the business-folk billionaires there dwarf American ones, and you wouldn't find those in a communist country. Here's a list: https://en.wikipedia.org/wiki/List_of_Chinese_by_net_worth
What China isn't is the libertarian fantasyland American investors want it to be. Someone like Tencent founder Ma Huateng is or was worth recently $66 billion. Maybe China's goverment wants him to be worth $33 billion instead.

Baseball_Fan

Well sure...and Mickey mouse is a cat...

Best regards

Baseball Fan

LewisBraham

If China is communist, explain then how such glaring wealth inequality exists in China and there are numerous publicly listed Chinese companies with capital invested in them that produce significant profits for their founders and investors. Note the word "capital" in the previous sentence.

Shostakovich

Classifying China's political / economic regime is an interesting exercise. I like "totalitarian capitalism". Certainly slave / prison labor doesn't seem to be inconsistent with certain varieties of capitalism. Genocide is another matter.

MikeM

Googling definitions, China seems closer to a totalitarian state than a communist state but certainly shades of both.

What are the Important Characteristics of Communism
Abolition of Private Property.
Collective Ownership of Means of Production.
Central Planning.
Elimination of Unfair Gaps in Incomes.
Provision of Necessaries of Life.

Totalitarian regimes are often characterized by extensive political repression, dictatorship or highly undemocratic government, widespread personality cultism, absolute control over the economy, censorship, mass surveillance, limited freedom of movement (most notably freedom to leave the country)...

bee

ARKathy Wood Chimes in:

“Well, I would say in any of the areas we are looking right now the multiples structure, the valuation structure of those companies is down and probably not going to come back quickly and may even go down more.” But she later said: "I'm sure we’re going to find some very interesting companies in the innovation space, and so we’re going to keep an open mind there.”

ARK also noted Tuesday that there are opportunities in Chinese healthcare for two critical reasons: overwhelmed physicians and underfunding.

cathie-wood-sells-china-tech

ProtonAnalyst33

Baseball_Fan said:

Wouldn't send a dime of my hard earned monies over there...I literally and willingly pay double for any product not made there and made in the USA. I don't care what the returns might be and for the record I believe that they will be terrible going forward based on do you really believe any sort of accounting standards they have there and what the Chinese gov't will do...it's all a con game and you might be a a fool if you play along in an attempt to "capitalize on the growing markets over there"...after school tutoring shell companies...sure, those numbers were real....sarcasm...and who in their right mind wants to support a repressive communist government that is building weaponry to potentially be used against our troops and contractors...not me, no thanks.

Good Luck to All,

Baseball Fan

Respect your opinion, but I am curious - have you ever been to China Baseball_Fan?

Baseball_Fan

Hi Proton,

Candidly no I haven't and have had several occasions to do so on a professional level and have declined each time.

I'm simply not interested in going there.

No thank you, not for me.

Best regards

Baseball Fan

rono

Hi folks

I've owned MCHFX, MATFX and MPACX since the beginning of the plague. Folks should invest their money where they are comfortable. However, my biggest losses have occurred when I let my emotions get in the way.

And, yes, I've been to China.

And so it goes,

Peace and wear the damn mask

Rono

ProtonAnalyst33

Baseball_Fan said:

Hi Proton,

Candidly no I haven't and have had several occasions to do so on a professional level and have declined each time.

I'm simply not interested in going there.

No thank you, not for me.

Best regards

Baseball Fan

No judgement, was just curious. I can't back this up with data, but in my personal experience, i've found people are more open to investing in places they have been and had good experiences with. Seeing how the china-US geopolitical climate is and what's on headlines in us media, I completely undrestand if most US based investors who have no been to china are not inclined to put money to work over there.

ProtonAnalyst33

rono said:

Hi folks

I've owned MCHFX, MATFX and MPACX since the beginning of the plague. Folks should invest their money where they are comfortable. However, my biggest losses have occurred when I let my emotions get in the way.

And, yes, I've been to China.

And so it goes,

Peace and wear the damn mask

Rono

Wow, you've done quite well and aren't afraid of concentrated asia bets! I used to be invested in MCHFX, but didn't like the low active share, so swapped for a China ETF instead. I also looked at MPACX but chickened out due to what I recall as a really high allocation to healthcare?

JonGaltIII

It sure seems like Cathy was on to something. FSEAX (-12.92%) and ARTYX (-10.96%) have been real downers YTD.

On the FSEAX front, the fund manager had a contrarian opinion in October (Fidelity Commentary)

“Yet I continue to be bullish on the outlook of China over the medium to long run,” Zhao says. “I’m seeing some attractive stock prices in many of the new-economy segments in China following the recent market pullback, and I welcome the correction caused by short-term concerns, which I find are great times to build long-term positions.”

He believes increased regulations on China’s internet companies and concerns among China’s leaders regarding wealth distribution in the country are not anti-capitalistic and not meant to stifle entrepreneurship. The regulations, he says, are in fact beneficial for the long-term growth and stability of the whole economy.”

At this point, I’d like to know what Zhao’s definition of medium to long run is.