Gold and silver stocks are hitting records all over the place. Some large-caps are hitting new 52-week highs. In a fragmented, yet positively inclined equity market, trying to find the next big trade is tough.

I feel pretty confident in the gold trade. Gold prices are likely to keep on trending higher, as there really is no reason why they shouldn't. But gold now is a trade and less of an investment. The big money's already been made here over the last couple of years. It's a trade that represents the buy-high-and-sell-higher investment philosophy. Right now, I want to find some value for my investment dollars.

The one sector that keeps jumping out at me continues to be Chinese equities, which have been in the doldrums for quite a while. There are all kinds of good businesses out there that are trading on U.S. stock exchanges at very reasonable prices. The problem with this equity group is that domestic Chinese equities continue to be in the doldrums and investors just aren't interested at this time. This presents ideal conditions for the value investor.

China has a lot of problems in terms of its economic development, but its appetite for growth isn't going away anytime soon. In fact, if the global economy continues on its path to recovery, China's export position will only get stronger. The domestic Chinese equity market did tremendously well in 2006 and 2007. Then it corrected significantly in 2008 and, after a decent recovery last year, has been trading sideways. The Chinese marketplace is uncertain about economic stimulus plans and a bubbling housing market. Yet the growth is still there. Eventually, the stock market will be playing some catch up, and this is why I like this sector now.

There are a lot of U.S.-listed Chinese companies that are speculative and high-risk. But, an investor can also consider owning an exchange-traded fund (ETF) representing the biggest large-caps. What's clear to me now is the value that's developed in these stocks as a group. There will always be a risk premium associated with Chinese equities, but now is the time to put this group on your radar screen. I don't expect a bull market to develop in Chinese shares just yet, but, like I say, eventually the equity market will play some catch up.