China Stocks Gains of up to 16% in just three weeks. What's next?!
Stock-Markets / China Stocks May 01, 2008 - 10:15 AM GMT
Just three weeks ago, in my April 10 Money and Markets column, I told you Chinese shares looked like a great bargain. I even titled my piece " Buy Like Crazy! " My reasoning ...
First, China's stock market had already declined nearly 45% from its record highs earlier this year.
Second, the decline was unjustified by the underlying fundamentals in China's economy, which were powering ahead ...
GDP growth was running at plus 10%; western provinces at 14%
First-quarter retail sales were headed toward a 20%-plus increase
February oil imports surged more than 18%
And a key manufacturing index soared to extremely bullish levels
Third, all my proprietary technical indicators were screaming BUY!
My Conclusion: I pounded the table, urging you to consider purchasing a slew of investments in China, ranging from the iShares FTSE/Xinhua China 25 Index ETF (FXI) ... to shares in select individual Chinese blue chips, such as China Petroleum & Chemical (SNP) ... CNOOC Ltd. (CEO) ... China Unicom (CHU) ... and Huaneng Power International (HNP).
The results: If you followed my advice and purchased any of the above back on April 10, you're now enjoying gains of ...
 |
| As millions of new drivers hit the road each month across China, oil companies are raking in record profits. |
- Up to 1.3% on China Unicom ...
- Up to 12.7% on CNOOC ...
- Up to 8.2% on Huaneng Power ...
- Up to 8.0% on the FXI ...
- Up to 16% on China Petroleum!
Not bad for just three weeks!
What to do now with those investments? Well, I continue to think Asian shares represent better value than most U.S. stocks. Key natural resource stocks are the only exception in my book. I suggest you hold all of the aforementioned China plays. And if you're not on board any of them, I would consider purchasing them pronto!
Of course, Asia's not the only place that's been seeing tremendous action. So ...
Let's Look at Some of My Favorite Natural Resource Markets
Gold: The long-term bull market is very much intact, and my target remains $2,200 an ounce, minimum.
But right now gold is consolidating its gains of the past year, and is likely to pull back to the $850 level.
Don't worry. Any pullback in gold right now is healthy, and bullish longer-term. Use it to add to your positions. Some of my favorite gold investments ...
- Exchange-Traded Gold Funds (ETFs), like the streetTracks Gold Trust (GLD), which effectively offers investors physical gold bullion in the form of an electronically-traded security, with each share representing one-tenth of an ounce of gold.
Two other choices are the iShares Comex Gold Trust (IAU) and the Central Fund of Canada, Ltd (CEF).
- Gold stock mutual funds like the Tocqueville Gold Fund (TGLDX) ... U.S. Global Investors World Precious Minerals Fund (UNWPX) ... and the U.S. Global Investors Gold and Precious Metals Shares (USERX).
- Specific gold shares: See my Real Wealth Report for specific buy and sell recommendations to maximize your profit potential in gold.
Oil: Unbelievable market isn't it? Just last week, black gold hit an all-time high of nearly $120 a barrel. And its bull market, like gold's, is far from over.
Indeed, as I've mentioned previously, I expect to see the price of oil reach at least $200 a barrel before this bull market runs its full course.
But that's not going to happen overnight. In fact, like gold, I expect oil to pullback and consolidate some of its gains, by thrusting down to just below $100 in the days and weeks ahead.
And when that happens, you'll be hearing all sorts of fanatical forecasts that oil's bull market is over, and oil is going to drop back to the $50 level.
Don't fall for them!
Instead, continue to follow my advice. Hold on to these lucrative investments in oil, and when the price of black gold dips below $100 a barrel— Buy More!
To review, some of my favorite investments in oil that I've mentioned previously in Money and Markets have done pretty well and include ...
| Ticker | Investment | Mention Date | Gain |
| OIH | OIL SERVICE HOLDRS TRUST | 09/15/2005 |
62.9% |
| XLE | ENERGY SELECT SECTOR SPDR | 10/10/2005 |
70.0% |
| IYE | ISHARES DJ US ENERGY SECTOR | 10/10/2005 |
72.9% |
| VDE | VANGUARD ENERGY ETF | 10/10/2005 |
70.2% |
| IXC | ISHARES S&P GLBL ENERGY SECT | 10/10/2005 |
55.8% |
| SNP | CHINA PETROLEUM & CHEM-ADR | 06/15/2006 |
97.6% |
| CEO | CNOOC LTD-ADR | 06/15/2006 |
136.8% |
| STOSY | SANTOS LTD-SPONSORED ADR | 06/15/2006 |
76.5% |
| PTR | PETROCHINA CO LTD -ADR | 06/15/2006 |
49.8% |
| ENPIX | PROFUNDS OIL&GA ULTRASEC-INV | 08/10/2006 |
54.7% |
(Performance through close of trading April 28, 2008) |
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Foods: If you think the food crisis enveloping the world is bad now, heed my warnings: Food prices are headed much higher in the years ahead. We will see massive hoarding, food riots, and entire governments collapse as a result.
But we're not there yet. The stunning increase in food prices you've seen so far is just the opening act of the bull markets underway in this sector.
For instance, according to my models, which turned bullish way back in January 2005 ...
- Corn, already up 177% in the past thee years, could triple in price.
- Soybeans, already up 111% in three years, could easily double again.
- Wheat, which has jumped 160% in the past three years, could surge another 400% to as high as $38 a bushel!
- And rice, which has already almost tripled in price, could triple yet again.
The prices of everything from eggs, to milk, to beef are also headed higher. I expect them to triple and even quadruple in the next few years.
Water: Don't ignore another huge bull market that's shaping up: In water, or what I call "blue gold." Indeed, rising food prices are not just about overwhelming demand pit against tight supplies.
No indeed, the bull market in agricultural commodities is also in large part due to the lack of water in the world — not just potable, or drinking water, but also irrigation — and woefully archaic irrigation infrastructures in many parts of the world.
As we continue to witness, the natural resource markets are red-hot. Across the board, be the commodity oil or corn, each pullback merely signals another increasingly lucrative opportunity for investors to ride the bull market to even greater highs.
Best wishes,
Larry
P.S. For all my buy and sell signals and flash alerts — subscribe to Real Wealth Report for a modest $99 a year. You'll get 12 hard-hitting monthly issues on the world of natural resources and today's fast-changing global economy.
Real Wealth has already bagged almost $100,000 in gains for its subscribers in the past four years. I think it's the best $99 you'll ever spend. Join now!
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