October Newsletter is not for grabs as of yet. It will be free to the public at the end of the months. however, some of what we just said and sent to our clients reflects our commitment providing valuable stock research with insigh how to make money in current market environment. If you read this passage, you'll see we said Chinese telecom sector is the best on big market days. All players beat the DJIA consistently - and guess what. Today, when the DJIA is up 80 points following the vote in the House, CHU is up 5.3% just as the rest of the sector. Read our analysis of the markets - or how to play it in volatile days like these - below. Similarly to the extreme negative days, we looked up stock trading of the extreme rallies that took place in the last two weeks. Focus Media Holding (FMCN) yielded the best return on strong market days, recording a gain of 16.1% on average! The stock delivered a relatively universal strong performance on all of the days, making it a strong candidate for a risky portfolio. Ctrip.com (CTRP) was not the most risky measured by volatility but one of the best ones during good market days. The stock yielded a hefty 13.2% gain on average largely thanks to a staggering 44% gain on September 18. But while FMCN gained during all those three strong sessions, CTRP actually fell the next day despite a strong market day. Ctrip’s strong average showing is attributed to the one time large gain and thus is less likely to repeat such stellar performance than a consistent FMCN. Baidu.com (BIDU) is similar to Ctrip.com in trading characteristics. While the stock gained over $60 or 20% on September 18, it pulled back the next day despite a strong market day. But it did gain 7.9% on September 30 well outperforming the DJIA suggesting that the stock can catch on fire any day. When it comes to consistent, strong gains, the telecom sector shines! Based on average return on strong market days, all four Chinese telecom companies made it to the top ten. Not only did they gain over 10% on average on those three days but they did it consistently! So while the DJIA gained 3.2% on average on strong market days, Chinese telecoms gained over 3 times as much. Looking at individual days, September 18 was their day, gaining almost 20% on average while next day they performed more modestly. Still, they gained 5.6% on average beating the DJIA’s 3.3% gain that day handsomely. Another sector we highlight is for the solar companies. We just found that solar companies proved to be sensitive to negative days, they did not show much strength on strong market days. Trina Solar (TSL) is the exception as the company recorded an average return of 11.6% on strong market days but it is largely attributed to a 25.4% gain on September 19. The company underperformed the DJIA on September 30 recording a gain of 1.9% only. Stocks that delivered a somewhat consistent, large gains are China Life Insurance (LFC), Sinopec Shanghai Petrochemical (SHI), Sohu.com (SOHU), NetEase (NTES), Guangshen Rail (GSH) and Huaneng Power (HNP). There are other names that we have no time to mention but we hope that the tables we provided will prove to be useful guide for the upcoming turbulent days. And for the long term investor we say this: don’t quit China because you will regret it. Wish you successful investing. RETURN: UP-DAYS RETURN: UP-DAYS RETURN: UP-DAYS RETURN: UP-DAYS RETURN: UP-DAYS   RISK Average MIN MAX DJIA 0.01 3.2% 2.3% 4.7% CTRP 0.28 13.2% -10.8% 44.3% ASIA 0.20 7.8% -11.3% 28.0% BIDU 0.13 7.6% -5.1% 20.0% TSL 0.12 11.6% 2.6% 25.4% SMI 0.12 0.0% -11.1% 12.9% CN 0.10 11.8% 5.4% 23.7% CHU 0.10 10.9% 4.1% 22.5% CNTF 0.10 6.7% -2.1% 17.2% JASO 0.10 7.2% -2.7% 16.6% ACH 0.09 8.3% 0.6% 18.4% GRRF 0.08 7.8% 1.7% 16.7% SSRX 0.08 1.8% -5.1% 10.2% HRAY 0.08 6.6% 0.8% 15.4% EJ 0.07 8.1% -0.4% 13.5% XFML 0.07 9.1% 0.8% 14.5% YZC 0.07 8.4% 2.3% 16.4% SINA 0.07 8.1% 2.1% 15.6% CEA 0.07 7.6% 0.1% 12.4% JOBS 0.06 3.2% -3.5% 9.0% NCTY 0.06 4.5% -2.4% 10.0% CHL 0.06 10.4% 6.4% 17.2% CHA 0.06 12.2% 5.9% 17.2% CEO 0.05 8.8% 4.4% 14.9% FMCN 0.04 16.1% 11.6% 20.6% SOLF 0.04 4.8% -0.1% 7.9% UTSI 0.04 12.9% 8.2% 16.4% ZNH 0.04 6.3% 2.1% 10.4% STV 0.04 7.8% 3.4% 11.6% JRJC 0.04 11.4% 8.1% 15.9% HBC 0.04 5.0% 2.8% 9.1% PTR 0.03 7.7% 4.9% 11.0% COGO 0.03 4.2% 0.8% 6.5% SNP 0.03 7.6% 4.9% 10.8% LTON 0.03 -0.3% -2.9% 2.7% SNDA 0.03 6.6% 3.8% 9.4% HNP 0.03 7.9% 5.0% 10.4% GSH 0.03 7.5% 5.7% 10.5% NTES 0.03 7.3% 4.8% 9.9% AOB 0.03 4.3% 2.1% 7.1% STP 0.02 6.0% 3.3% 7.5% LFC 0.02 7.2% 5.8% 9.4% SOHU 0.01 6.8% 5.6% 8.4% SHI 0.01 7.2% 6.0% 7.9% LONG 0.01 0.7% 0.0% 1.9% HTX 0.00 1.9% 1.6% 2.1% KONG 0.00 4.2% 4.0% 4.6%

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