Lombardi: Expert Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986
Stock Market Commentary & Forecasts, Financial & Economic Analysis

Welcome to Profit Confidential • Tuesday, May 22, 2012

Chinese Stocks Creeping Higher

Thursday, March 10th, 2011
By George Leong, B.Comm. for Profit Confidential

I’m not sure if you have noticed, but we have been seeing a ratcheting up of Chinese stocks since early February. It’s amazing what a week-long holiday break will do. Just take a look at China. I’m not sure if you have noticed, but we have been seeing a ratcheting up of Chinese stocks since early February. It’s amazing what a week-long holiday break will do. Just take a look at China.

The Shanghai Composite Index (SCI) is trading just over the key 3,000-point level. The SCI is also up a healthy 6.94% in 2011, better comparatively than the key U.S. indices such as the S&P 500, DOW and even the growth indices in the NASDAQ and Russell 2000.

On the chart, the SCI is trading above both its 20-day and 50-day moving averages, which is bullish. And there appears to be additional gains going forward.

This is encouraging given the SCI weakness in 2010.

In an investment newsletter I write called China Investment Letter, I have long been a bull of Chinese stocks listed in China and as ADRs in the United States. I’m a big believer in boosting up your overall returns by adding Chinese penny stocks and micro-cap stocks.

There has been a rise in analysts and media types who are saying that China is due for a correction and stocks are overvalued there. If you take a look at the comparative valuations, Chinese stocks are much cheaper than U.S. stocks. Chinese stocks attract a lower valuation due to the higher risk of operating in China.

At this juncture, we are seeing renewed buying of commodities by the Chinese. Whether it is gold, silver, copper, corn, wheat, cotton or other commodities, the country has a massive appetite for commodities and will continue to look globally for these.

All you have to do is to just think about the sheer size of the country’s middle class, which is mind-boggling and clearly reflects the amazing potential in China. The World Bank estimates that, within five years, there will be 542 million middle-class consumers in China. Yet that may be conservative, as I have seen top-line estimates at around 700 million.

Did you know there are over 800 million cell phone users in China? Just imagine the potential for wireless companies.

How about the largest networks of high-speed tracks in the world where trains can travel at close to 400 kilometers an hour and even more? Imagine the need for concrete, steel, and trains?

China is also expected to add over 2,000 planes over the next few decades. The Boeing Company (NYSE/BA) just signed a new $10.0-billion deal to supply planes to China and currently has about half of the Chinese aviation market.

Clearly, China is on the right path into developing into a superlative world economic power as well as a basin for incredible and sustained growth across many sectors, including industrial, mining, energy, services, and technology. The reality is that, if it is saleable and in demand, then you know that China will likely have the consumer market for it.

Next Post:
Previous Post:

Tags: , , , , , ,










Sign Up for PROFIT CONFIDENTIAL and
receive a FREE copy of our exclusive report:
"A GOLDEN OPPORTUNITY FOR STOCK MARKET INVESTORS"

Enter e-mail:

We respect your privacy and
will never share your e-mail address.



Profit Confidential AuthorGeorge is a Senior Editor at Lombardi Financial, and has been involved in analyzing the stock markets for two decades where he employs both fundamental and technical analysis. His overall market timing and trading knowledge is extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi’s popular financial newsletters, including The China Letter, Special Situations, and Obscene Profits, among others. His trading advice on stocks and options is also found on his daily trading site, Daily Profits. He has written technical and fundamental columns for numerous stock market news web sites, and he is the author of Quick Wealth Options Strategy and Mastering 7 Proven Options Strategies. Prior to starting with Lombardi Financial, George was employed as a financial analyst with Globe Information Services.

Daily Profits


Enter your e-mail address to subscribe to
Profit Confidential — IT'S FREE!
Enter e-mail:
ALSO RECEIVE A FREE COPY of our exclusive report:
"A Golden Opportunity for Stock Market Investors"

McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams

 

Corporate
About Us
Privacy
Disclaimer
Contact Us
White List
Sitemap

Profit Confidential
Predictions
Gurus
Archives
FREE Sign-Up
RSS
Twitter
Facebook

Editors
Michael Lombardi
George Leong
Mitchell Clark
Tony Jasansky
Robert Appel
Wendy Potter
Sasha Cekerevac

Topics
Gold Stocks
Stock Market
Bear Market
Bull Market
US Dollar
Euro
Interest Rates

Expertise
U.S.Deficit
Real Estate Market
Debt Crisis
Chinese Economy
Economic Analysis

Guidance
Investment Guidance
Retirement Plan
Chinese Stocks
The Best Stocks
Gold Stock Picking
Real Estate Investment

Resources
Gold
Precious Metals
Real Estate News
Gold Investments
Investing in Real Estate


Profit Confidential Disclaimer