One of my favorite investment analysts is Jim Rogers. He thinks that the Chinese equity markets look close to being done with their correction. Chinese stocks have been tremendously volatile (up and down) and those markets have affected sentiment for U.S.- listed Chinese stocks as well.
I firmly believe that one of the greatest investment opportunities this century is Chinese equities. Right now, there are so many great companies generating excellent financial growth, it’s difficult to choose which opportunities are the most attractive.
A lot of U.S.-listed Chinese stocks have corrected along with the domestic market indices. Because of their perceived higher risk, they’ve also been shunned in recent months by institutional investors. There are a lot of incredibly good values among this group of stocks and I know they are going to pay off eventually.
Another reason why institutional investors aren’t looking very much at this group of stocks is because most U.S.-listed Chinese stocks are micro-, small- and medium-cap companies. There aren’t a lot of large-cap Chinese stocks listed in the U.S. equity markets.
One group of U.S.-listed Chinese stocks that’s been particularly volatile is the solar energy industry. I have a strong feeling that this group is going to be one of the first to lead the recovery from the current correction.
Even though domestic stock market action is bearish, it’s still an exciting time to be an investment analyst, because the opportunities out there are compelling. Right now, it’s not a difficult task to figure out which companies are the best opportunities. The compelling question is: when are these stocks going to take off all over again?