SCHWARTZ BUY RECOMMENDATION this morning. Yes, with China (domestically) down -50% off its peak and the related Chinese region indices down slightly less but now showing some signs of a bottom and turn around, I’d suggest that its time to put some sidelined money back to work in ASIA (during this beginning of the Asian Century). One mutual fund I’ve stumbled on, I wasn’t out there looking for it, is Fidelity China Region Fund (symbol FHKCX) and I’m sure there’s other similar funds from other fund companies which are just as good as well. (I plan on searching for them.) A neighbor asked me to look into FHKCX. When I did I liked what I found. Here’s the scoop. FHKCX invests in the Asian region, those countries which are closely tied economically to China. Like Taiwan (which long time, and so far correct, Chinese & commodity bullish advocate, well-known Jim Rogers has recently bought into and is recommending), Hong Kong, China itself, Australia & Indonesia, etc. I looked at some of the companies in the portfolio, names such as Taiwan Fertilizer, HON HAI Precision, Hutchison Whampoa and liked what I see. In other words, there’s lots of well known Asian powerhouses in the portfolio which are tough to buy shares in for American investors. I liked that. Also, FHKCX, after falling -40% from its peak on October 29th, 2007, hasn’t set a new low since March 19th., all the while the Shanghai Stock Exchange keeps dropping (and mauling millions of new Chinese investors; there was obviously a bubble there). That satisfies “Trader Vic” Sperandeo’s first of three requirements for a reversal-of-trend, not going down any longer. His second requirement, breaking a downtrend line drawn off the top, is also in place. And the third requirement, a successful retest, if we use a little leeway, is possibly in place as well. Vic says two out of three is enough to buy. So I like the FHKCX chart overall.
SCHWARTZ BUY RECOMMENDATION: Wednesday, April 23rd, 2008
BUY FIDELITY CHINA REGION FUND! NOW! BUY 25% OF YOUR NORMAL SIZE POSITION IN FHKCX NOW.
Then settle back and wait to see if we can get some profit going our way. I figure scaling-in is the only fundamentally sound way to invest today. As soon as we have some profit and further upside confirmation, we’ll buy another 25%. I don’t want to go too much further than 50% since I still think this rally is a bear market rally. But with China, which Jim Rogers calls “unstoppable” for the long term, down -50% domestically and -40% in outside mainline China trading, and Rogers resuming buying, this substantial size pullback is a good buy point. Even if things get much worse, we’ve already missed -35% to -50% of a bear market. We can afford to put a foot back in the water here. In point of fact, we can’t afford not to!
04-23-2008 8:50 AM
Filed under: China, Principles of the Stock Market, Richard Schwartz, Technical View, China View, Commodities, Investing Strategies, Market Bottoms, Brazil, Global Investing, Higher Higher & Higher Lows, Global Trend, The Principle of Technical Analysis