China Stocks Are The Best Buys Out There!
Speculation is running rampant today that China will end policies put in place to cool the housing market. Should these policies change and the government allow for a resurgence in growth, Chinese stocks may be at record cheap levels and be the best buys of 2010. Many Chinese stocks are trading at price to earnings ratios of as low as three, four and five. These depressed levels have been caused by massive fear of some gigantic depression in China coming soon. Bottom line is this, China is not going to allow that to happen in the near term. Maybe 10 years down the line it is possible or even 20 years, but not in the next year or two. The Chinese government has way too many tools to combat this and we are already seeing that with this major speculation on them allowing the housing market to surge again.
When looking at stocks in China, it is important to compare the possible growth there to other places in the world. The United States and Europe are likely to continue with little to no growth in the next few years. Does anyone actually think China will cease to grow? Not a chance in my opinion. If there is one area to be in it is China for growth and prosperity. That is what makes it so shocking to see Chinese stocks like Xinyuan Real Estate Co., Ltd. (NYSE: XIN), ShengdaTech, Inc. (NASDAQ: SDTH) and China Armco Metals, Inc. (AMEX: CNAM) trading at such small price to earnings ratios.
When all is said and done, if there is going to be any growth, it is going to come from China and the emerging markets. With so many stocks trading at such tiny P/E ratios, this is the place to be in my opinion. To get swing trades on China stocks, guidance and analysis on the markets, join the Research Center.
Chief Market Strategist
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