China Cuts Rates by 1% - Most in 10 years!

So the Chinese are stimulating their economy by spending nearly $600 billion by the government (announced last week and posted here on the blog).
http://betterbizbooks.blogspot.com/2008/11/chinese-economy-slowing-down-quickly.html


Now they are trying to stimulate their local economy by encouraging more lending. People will be paid less to save so they will need to invest their $$$ (both banks and individuals). As I have pointed out, China's economy is 50% export based so their economy gets beaten up pretty good when Americans stop buying stuff due to the credit crunch and concerns about their economy. Will it spark increased spending amongst the Chinese consumers? Time will tell....I am not holding my breath though :)



Dan Ross
http://www.betterbizbooks.com/

Retail Growth in China - Street.com Picks

Interesting take as the two suggestions are Guess and American Apparel, not Chinese retailers per se. I would focus on Chinese brands growing nationally as that is where the ENORMOUS growth opportunities are. Don't get me wrong. The Chinese middle income people will want GLOBAL brands like Guess / American Apparel but the opportunities are MUCH more limited than domestic companies and these companies have TONS of exposure to the U.S. economy and, I would think, the goal of this interview would be to get exposure to the Chinese consumer/retail growth.



Dan Ross
http://www.BetterBizBooks.com

Chinese Investing - Wind Power

So by now anyone reading this blog nows how bullish I am regarding the Chinese economy in the 21st century. I think their work ethic is 2nd to none, their economy is still in its infancy, there are TONS of geographic/trend plays still ripe for the picking and a middle class that is JUST NOW developing. I compare it to the U.S. in the 50s/60s but with the potential for wealth creation of the U.S. in the 80s as geographic expansion occurred.

If you are a growing economy you need more power. You get it from coal, nuclear, wind, solar, etc. Coal drives something like 70% of U.S. power. The Chinese have done this as well but their pollution controls haven't been as strong as ours. They have been focused TOO MUCH on low cost stuff up until now. With the growth of their manufacturing sector, their environment is in SHAMBLES.

So they are increasingly turning to solar power and wind power, which they hope to export to the rest of the world later one. One way to play the "green revolution" with a strong China focus is APWR (A-Power Energy). Something to look into....Due your DD.







The weekly trends still appear downward for now but the short-term charts are pretty flat. You can see from the MACD curves that there is potential for a HUGE breakout at some point. The 10 week moving average is still coming down but it is at $9.00. An 80% bounce could happen and then get SLAMMED by the market quickly. I think I'll keep on building my cash balances and put some $$$ to work with APWR early in 2009. Same goes for Gulf Resources, which is now consolidating but the weekly trends are still coming down. That stock appears further along in its consolidation pattern and next week should indicate a crash of the stock or a potential run as the stock is now trading RIGHT AT the 10 week moving average. It is Overbought on the daily charts but NOT on the weekly charts :) We'll see which trend is more powerful....

Dan Ross
http://www.BetterBizIdeas.com

Still cautious on the stock market despite intraday reversal here

So here are a few articles I have come across in recent days as well as observations

http://seekingalpha.com/article/105472-why-i-sold-my-china-positions

1) Nortel, JCPenney & Pizza Hut all had layoffs here in Dallas.

2) American Express became a bank. They now get access to the gov'ts coffers via discount window and can sell their securitized credit card balances to the government. They get liquidity. WOW!

3) There is more push to get these auto manufacturers part of the bailout package. Did you know that GM, less than a decade ago, paid out dividends & bought back stock worth $20 BILLION? If you knew that, how would you feel about bailing out the auto manufacturers, investors and unions? If they didn't pay out the cash the unions would have taken it via DEMANDING higher wages for an "honest day" of work.

Which then brings me to this CNBC/LinkedIn.com poll. Looks like most American's, by state or career path, don't agree with the auto manufacturers getting one penny....

http://www.cnbc.com/id/27593480/

4) Finally, unemployment / weekly job claims data today stunk. Below are some graphs re: unemployment and the trends. With every passing week and datapoint I see (lots of new data) I get more adamant that 10% unemployment is possible.

Dan Ross

http://www.BetterBizBooks.com/

Chinese Economy Slowing Down Quickly

http://blogs.barrons.com/techtraderdaily/2008/11/10/focus-media-warns-on-slowing-china-ad-market-stk-falls/

It wouldn't surprise me to see Chinese stocks down notably tomorrow. After the bell, an industry stalwart (Focus Media) and big chinese holding of many mutual funds/hedge funds announced they are missing guidance slightly this quarter but guiding down EPS estimates SIGNIFICANTLY for next quarter.

Which begs the question.....How much is the Chinese economy slowing down? Will even 5% growth happen next year? Is their stimulus package enough? How much will Google's stock price fall since their EPS is based on advertising as well. Yes, this is China vs. the U.S. but people have been hearing rumors about a slowdown in online advertising spending and an "informal, unofficial" hiring policy per the video below.



Dan Ross
http://www.betterbizbooks.com/

Things changing in Macau?? WHOA!

Gaming stocks got pounded today, based on the article below, on news that mainland Chinese will only be able to visit the place twice a year vs. currently allowed to visit the island about 6 times or so per year.

http://biz.yahoo.com/rb/080819/casino_stocks.html?.v=1

This clearly has put a ceiling on the expectations surrounding gaming stocks. MGM Mirage (MGM), Las Vegas Sands (Venetian Owners: LVS) & Wynn Resorts (WYNN) got hammered today. Oh, and that really puts a dent on me going into Melco (MPEL), which I mentioned a few days ago. I think I'll be holding off on investing until all the analysts take their EPS estimates down and downward pressure in the shares slow down.

Dan Ross
http://www.betterbizbooks.com/

Great link on stocks that could double in China

http://www.stockpickr.com/problog/856/

Giant Interactive (GA) is on my radar but I have too much capital tied up in Gulf Resources (GFRE.OB) right now to purchase any shares. I agree with their philosophy re: GA. Definitely undervalued......the play is social networking in China + continued game development. It wouldn't surprise me, over the long-term, if most of the value of the company became dominated by their investment in http://www.51.com/, a chinese social networking company.

CPSL is mentioned in the above article as well :)

Here are a few charts of CPSL, which was up 9% today on their 2Q EPS announcement. The stock appears to be ready to begin a weekly uptrend, coming out of an oversold condition. The daily charts started ROCKING and ROLLING today on strong volume.

The CEO of CPSL owns 45% of the company so hopefuly his interests are aligned with shareholders :)

http://www.fool.com/investing/general/2008/07/21/5-top-insider-owned-stocks.aspx

Dan Ross
http://BetterBizIdeas.com

Interesting Chinese Economy Facts

“In 20 years, China’s cities will have added 350 million people — more than the entire population of the United States today.”

“By 2025, China will have 221 cities with more than one million inhabitants — compared with 35 in Europe today — and 24 cities with more than five million people.”


“By 2030 1 billion people will live in China’s cities… 170 mass-transit systems could be built…40 billion of square meters of floor space will be built in five million buildings—50,000 of which could be skyscrapers.”

In other words, as China transforms itself from a nation of farmers to a nation of urban dwellers, the equivalent of 10 New York cities will need to be built.

Dan Ross
http://www.BetterBizIdeas.com

Investing in Chinese Stocks - Some great resources

How do I find out about fast growing chinese companies, listed on the AMEX, NYSE or Nasdaq (ie. they have to comply with SEC standards vs. OTCBB stocks)? A ffew folks have asked me this in recent days so I'll toss some of my tools out here since anyone can access them.

Here are two resources - Between the two of them you can find tons of info. about the companies, those that worth a darn, etc.
http://www.tf1188.net/red.asp

http://chinabizfocus.com/modules/InvestChina/

What do I look for in a company?
1) HUGE revenue growth - 50% + annual with 75%-100% desired. I'd like to see $25 million + in sales as well.

2) I want reasonable prices (growth at a reasonable price - GARP investing)

3) I want PROFITS. I HATE buying companies that don't make $$$. It wreaks of not managing a business/bottom line. Companies that have a profit orientation (like the $$$ were their own) have higher ROE (return on equity) and generate larger shareholder returns over the long-term (just my 2 cents/opinion from what I have seen over the years.)

Resources I use

http://www.caps.fool.com

I use that site and check growth rates, info. about the company, etc.

Another great resource for looking at Q-Q trends, Y-Y trends, key stats and income statement/balance sheet info. is http://www.finance.yahoo.com

Here is what I look for
http://finance.yahoo.com/q/is?s=ABAT&annual <--annual income growth
http://finance.yahoo.com/q/is?s=ABAT <--quarterly growth to look for growth or lack thereof

Balance Sheets - I don't like companies with tons of debt. Heck, I would like to see nearly no debt at all! I would also like to see positive cash flow from operations

http://finance.yahoo.com/q/bs?s=ABAT&annual
http://finance.yahoo.com/q/cf?s=ABAT&annual

Great stockchart websites with technical analysis capabilities and good views/snapshots.

http://www.StockCharts.com
http://www.BigCharts.com

Sometime this weekend I'll post a list of Chinese companies listed here that are growing fast and furious, by sector. Maybe I can help you find a great company to invest in. To each their own re: investment style/thesis.

Dan Ross
http://www.BetterBizBooks.com

Even Red Hot China is starting to Slow Down/fall....

As my posts in the recent months have been U.S. economy focused I thought I would share some insights into what is regarded as the fastest growing economy in the world. The Chinese economy is forecast to be larger than Japan and the U.S. economy by 2015 :)

Chinese stocks had been trending upward at an ever accelerating rate (i.e. parabolic) since 2005. The parabolic nature of the Chinese rally came to an end as the US housing market/credit crisis began to take hold in Q4 2007. Currently, the iShares FTSE/Xinhua China 25 Index (FXI) trades within the confines of a significant downtrend.

I would also note that the Chinese government was trying to put curbs into their banking system and trying to have banks build up their capital base via loaning out all their $$$ during this time frame as well. With so much of their economy tied to their economic development (ie. real estate in China) the government had a good amount to be concerned about. The SMOG is INSANE. Having personally been to China some 15 years ago I'll attest that I was AMAZED to see entire DOWNTOWN projects (10-15 skyscrapers) going up at one time while several MAJOR 10-12 lane highways were being constructed as well.

Great charts - sign up today @ http://www.chartoftheday.com/






Source - http://www.chartoftheday.com/
Source - iShares

Dan Ross
http://www.BetterBizBooks.com