Tuesday, September 2, 2008

Investing in China

Over the long weekend, I thought about my personal investments, and how to structure my portfolio for the future. Through a stroke of amazing luck (believe me, no skill involved in this one), I was largely in cash in the summer of last year. I essentially sold all at the peak. I've had a good time researching US and some European companies, and getting some great deals on some quality companies that were unfairly caught up in the market turmoil.

As I think about the broad market, however, I just can't get extremely excited. I'm no economist, but it seems to me that there's still lots of bad news out there with respect to the financial sector, there are still many houses on the market, commodity prices are still high. My read -- a long, slow recovery that begins I know not when.

Ah, but the developing world with the blazing growth rates!! How to participate in that?!? I'm troubled by that. I'd like to get more involved with investing in China, India, and maybe some of the oil-producing countries. I'm not sure, however, that tossing money at an index fund that tracks a broad market index is the way to go. I'm not certain that the ShangHai index in general is a great investment right now. Still, there are many quality Chinese companies that I'm sure will be listed over the coming year -- many fantastic investments. The problem is, can you trust Chinese financial data? Even those companies listed on foreign exchanges? Anyone have any ideas here? I'd love to be able to run valuations on Chinese companies the way I do on US companies. Is the data out there?

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