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A Major Reason Why I’m Buying China Today

Thursday, September 22, 2016 5:12
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(Before It's News)

How do you know for sure when everyone has given up on an investment?
One simple answer is this: When the folks whose livelihoods depend on that investment recovering have given up… that's a true sentiment bottom.
I believe that's where we are in China today. And it's a major reason why I'm buying China right now. Let me explain…
I'm not sure a market can be more hated than the Chinese stock market is today…
I visited China back in June. We had several whirlwind days of meetings with everyone from institutional brokers to retail asset managers.
My goal going in was simple: to figure out what I could be missing… and to make sure the opportunity in China was really as good as I thought it was.
I went into these meetings sharing my positive thesis on China. I expected folks would be excited to see me – an American enthusiastic about China's prospects.
The reality was different…
I was the most optimistic person in nearly every meeting we had. The folks we met with were generally dejected… They basically “parroted” the American view that China's prospects weren't good.
In short, these folks who needed a stronger Chinese stock market, personally, couldn't even muster up a “Yeah, Steve, you're right.” They had no enthusiasm. They were completely defeated.
And on the surface, they had solid concerns. But here's the thing…
None of their objections held up.
They worried about what you would expect them to worry about. They worried about things like global growth and how the Chinese government might handle stock market volatility.
But to me, all of these worries were really just excuses to be pessimistic.
You see, Chinese stocks have lost a lot of money over the past year, and the mood was gloomy.
For example, China's A-share market fell roughly 50% from mid-2015 to mid-2016. (The A-share market is China's “locals only” stock market.) That decline has created incredible opportunity in China. But no one on the ground can see it.
Recommending Chinese stocks after this 50% fall has been like pitching someone on the opportunity in U.S. stocks in 2009 – or real estate in 2011.
Sure, those were the best times to buy… But no one who had just experienced the bust was willing to listen.
That's what I saw on the ground in China… Even the Chinese don't believe in their market.
This is fantastic. It's exactly what I love to see before investing. When everyone expects the worst, it doesn't take great news to turn things around.
Even folks whose livelihoods depend on a Chinese recovery don't expect it to happen. And that's what a true bottom in sentiment looks like.
There are plenty of other reasons why I'm interested in China. But this might be the most hated market on the planet today. And that's a major reason why I'm buying.
Good investing,
Steve
P.S. I recently put together a presentation on the major takeaway from my China visit. The country is currently undergoing a technology revolution. And today, we have an opportunity to buy China's future tech giants with hundreds-of-percent upside. I urge you to check out the full details in my presentation right here.

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