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 Friday, October 19, 2007

A Taste of China for the Bold Buyer
"So much cash in the market also means more volatility. Blaze Fabry, president of the Chinavestor research firm, estimates that U.S.-listed Chinese stocks are 2½ times as volatile on average as their American counterparts." Read article

By Kimberly Palmer, October 11, 2007    

"If market sentiment in the U.S. remains strong, as I suspect for Mon. and Tue., small cap NASDAQ listed Chinese names have room to go. However as soon as momentum runs out in the U.S., these small names will fall just as fast as they rallied. So just be very careful with market timing. There is certainly a way to make money with these plays, but I recommend it only to advanced investors." Posted on October 5, 2007 - bottom of page.

So let's take a look at top and bottom ten stocks from the U.S. listed China stock universe.

Well, large cap stocks dominate the winners list, PTR, CN, SHI, CHL, SNP, HNP, HTX - all large cap stocks. Bottom ten: ALL OF THEM ARE SMALL CAP STOCKS.

Surprised? Shouldn't be. Market volatility will remain the major issue for the upcoming week. I can totally see Asian markets - especially Hang Seng - tumble on Monday dragging international markets lower. U.S. won't look good either, somewhat toned down though. Tuesday is a possible bottom and you better watch out from Wednesday to Friday. Large caps will rally, smaller caps will lack momentum at first but will catch up later the week.

For stock picks, you need a professional advice, like the one that comes with Chinavestor's Advanced Membership. They're up 105% YTD!!!!

Going back to small cap stock: Monday is a possible bloadbath... Quote from the August Newsletter; "As we calculated, a typical weekly change for the FXI is +/- 3.4 percent. This is represented on the second chart. And while it happened 22 times that the FXI gained over 6.8% a week, it never happened with the DJIA." And this is just for the large cap heavy FXI. What do you think of the volatility of small cap stocks? My guess is this: plunge anywhere between 5-15 percent from Monday and Tuesday. But don't worry, they'll all come back. When? You should read October Newsletter "China stocks in the shadow of Wall Street".  

Additional Resources

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