Last Chance: The Top Four Stocks to Buy Before a Chinese Trade Deal Is Announced
Chinese stocks have been absolutely clobbered over the past year by nervous investors who fear the worst from Chinese trade talks.
I can’t think of a worse – or potentially more expensive – mistake.
A deal is imminent.
That means you want to plan for the best and, not to mention, all the profit potential you can handle.
The stocks I want to tell you about today have excellent fundamentals, terrific growth, and preferred status with China’s ruling elite. They are “global challengers” in the truest sense of the word.
First, the back story.
I’ve talked with tens of thousands of investors over the years and many tell me that they wish they’d gotten on board with the “FANG” stocks.
I totally understand.
Every $10,000 invested in these stocks when they went public is now worth:
…$224,660 (Google, now Alphabet)
That’s a grand total of $11,639,290 for having invested just $40,000 and a total return of 28,998.2%.
There’s nothing worse than knowing you’ve missed out on that kind of money.
Thing is, it doesn’t have to be that way.
Every now and again, you get another shot. Whether or not you believe what you see and do something about it… that’s the real challenge.
You see, companies like the FANG stocks don’t just magically appear out of thin air.
They often come on the scene by doing something different, and they make their money in ways that established competitors cannot contemplate. Dismissing them mentally simply because they’re the “new kid on the block” is normal.
Only that’s the last thing you want to do, especially when it comes to China.
We’ve talked about this many times.
Just, last week, for example,I warned you that you need to get in on Chinese firms, because they will go higher…and soon. And just last month, I urged you to prepare your money for a China-U.S. trade deal or risk getting left behind when the train leaves the proverbial station.
Contrary to what many investors believe, a deal is imminent.
What’s more, it’ll probably be unprecedented, and to paraphrase U.S. Trade Representative Robert Lighthizer, it may even “turn the corner in the economic relationship” between China and the United States.
Everything I’m seeing suggests both sides are playing well together behind the scenes.
President Trump, for example, is praising Chinese teams even as Lighthizer remains firm. There’s been discussion of a signing Summit and announcement at Mar-a-Lago.
The former is being translated into Chinese which allows President Xi to save face while remaining tough for his own audience. The latter is also critical to Chinese deal-making because the social aspect associated with negotiations like these is part of the “haggling” process.
Long-term reciprocity is key because success depends on establishing something called renji hexie – loosely translated friendships and positive feelings – that holds relationships of equals together.
The other concept being played out is called zhengti guannian which means holistic thinking. Westerners tend to process in linear fashion which each point leading to the next. Chinese feel they can only think about agreements as a whole.
I think this is particularly important because the Chinese asking for more meetings, bringing increasingly senior negotiators, and posturing are all signs of chiku nailao which means endurance or relentlessness.
While I had my doubts early on, it has become very clear – at least to me anyway – that President Trump is negotiating using tactics native Chinese recognize and respect, even as he plays to American audiences and a largely clueless Western media.
So, now what?
Chinese stocks are a mixed bag, a lesson many investors learned the hard way nearly a decade ago when fraudulent Chinese companies were – to quote Barron’s – “all the rage.” Many entered the markets using a process called the “reverse merger” to avoid the scrutiny associated with an initial public offering or IPO for short.
To be clear, those aren’t the kinds of companies I’m talking about.
I’m talking about very select group of companies – titans really – that are trading right here on U.S. exchanges using U.S. accounting standards.
They’ve got a couple of things in common:
- Strong financials and even stronger growth;
- A global footprint capable of taking on the FANG stocks in every market segment;
- They’re traded on U.S. exchanges requiring higher disclosure and better accounting;
- All are focused on technology and consumer growth which is where the growth will be for decades to come; and
- They’re making money hand over fist.
Prices are already on the move, which means the big money is moving in ahead of a deal.
These stocks all hit their 52-week lows only three months ago – Baidu hit $154.71 on January 3, and then jumped to $162.82 per share, up 4%.
Alibaba also hit their 52-week low on January 3, touching $130,66 before shooting to $184.70, an incredible 41% gain.
IQIYI dropped to a low of $14.80 before rebounding an amazing 101%.
And finally, Tencent hit a low of $32.15 a little before the others, on October 29, before rebounding to $43.49, a 35.3% rally.
I cannot say this strongly enough.
Success has always been priced into the world’s financial markets because the big money couldn’t afford to believe there wouldn’t be a trade deal. Prices are simply catching up with that eventuality.
The way I look at things is pretty simple when it comes to China.
Second chances don’t come along very often, but that’s what you have on your hands today with the BAIT stocks.
There will be an entirely new crop of millionaires created when the deal hits.
I want YOU to be one of ’em!
Until next time,