Customer Service 1 (888) 261-2693
Please enter Search keyword. Advanced Search
Home About Us Resources Archive Free Reports Market Window
Editor's note: Today and tomorrow, we're running a special two-part series from Steve Sjuggerud. Regular DailyWealth readers know Steve has been bullish on Chinese stocks for months, and one of his funds is up 100%-plus. If you took his advice and are sitting on a big winner, we strongly recommend you read and follow his advice over the next couple days...

China's Stock Market Index Is Up 126% in One Year... What's Next?

By Dr. Steve Sjuggerud
Monday, June 29, 2015

Dong Jun recently shut down his factory in China and let all 100 workers go.
 
He says he makes more money trading Chinese stocks than he does manufacturing lighting equipment...
 
"Manufacturing is a very hard business these days," Jun told the Wall Street Journal. "I want to make some money from the stock market and use the profits to restart my manufacturing business later, when the economy turns for the better."
 
Jun still shows up almost daily at his manufacturing plant... But he spends his day trading stocks.
 
So far so good, he thinks...
 
China's benchmark CSI 300 index is up 126% over the past year. And the more tech-heavy Shenzhen stock market is up 158% in the same time frame. He's getting rich.
 
Why bother with all the hassle of employees and manufacturing when you can make more in the stock market – right?
 
This reminds me of a story I heard here in Florida during the housing bubble...
 
"I'm going to quit this plumbing job," my colleague Matt Badiali's plumber told him. "I'm making more money buying and selling houses than I ever could make by fixing toilets."
 
Can you spot the flaw in the plumber's plan? It's the same flaw Jun has in his plan...
 
The plumber's plan was built on ever-higher home prices. His success flipping houses reaffirmed his plan. Jun is experiencing the same thing with Chinese stocks right now.
 
But house prices don't go up forever. And neither do stock prices.
 
Nine months ago, I said Chinese stocks were our best chance for 100% gains in the next two years. This might have been the most optimistic view about Chinese stocks on the planet at the time...
 
Chinese stocks are now up an astounding 126% in just the last 12 months. Clearly, there are some excesses in the market now.
 
The big question is, what do we do now?
 
"This is a bubble," Peter Churchouse recently wrote to his Churchouse Letter subscribers.
 
Peter is a good friend of mine... He has spent more than three decades in Hong Kong, specializing in Asian real estate. In that time, he has seen every type of boom and bust possible in the Asian markets. (I urge you to check out his excellent work here.)
 
Readers of the Churchouse Letter who took Peter's advice to buy local Chinese "A-shares" last fall, before they climbed, have made big profits. Now, Peter is tweaking his advice:
 
"Six months from now, the market could double up, or be down 50%. Nobody can ever call the top of a market like this one... I'm therefore tightening the trailing stop on my China A-Share recommendation."
 
Peter gave the right advice to his readers. Now, you need to do the same. You need to protect yourself.
 
As Peter said, there could be more gains on the table... or the bottom could fall out.
 
So how do you handle that?
 
The right way to do it is by following a strategy we use in my True Wealth Systems letter...
 
By using this strategy, you could have turned $10,000 into $82,000 since 2012.
 
And in tomorrow's essay, I'll show you exactly how we did it.
 
Good investing,
 
Steve




Further Reading:

"Hundreds of billions of dollars will flow into Chinese stocks in the next two or three years," Steve writes. "So even though Chinese stocks are up a lot, your upside potential is still dramatic." Get all the details here.
 
Earlier this month, Steve showed readers the opportunity shaping up in Japan today... According to his True Wealth Systems computers, Japanese stocks are about to outperform... "History tells us we should have more gains to come... Take advantage of it!" Learn more here.

Market Notes


NEW HIGHS OF NOTE LAST WEEK
 
Dollar General (DG)... dollar stores
Nike (NKE)... shoes
Aetna (AET)... insurance
UnitedHealth (UNH)... insurance
Wells Fargo (WFC)... America's largest bank
Starbucks (SBUX)... expensive coffee
Comcast (CMCSA)... cable TV
DirecTV (DTV)... cable TV
Electronic Arts (EA)... video games
Facebook (FB)... social media
Gogo (GOGO)... inflight Internet
Walt Disney (DIS)... entertainment
ConAgra Foods (CAG)... Big Food
Tyson Foods (TSN)... meat
WhiteWave Foods (WWAV)... organic food
Morgan Stanley (MS)... financial services
JPMorgan Chase (JPM)... financial services
Gilead Sciences (GILD)... biotech
Netflix (NFLX)... movie rentals
E-Trade (ETFC)... online broker
Charles Schwab (SCHW)... online broker
Abbott Laboratories (ABT)... Big Pharma
CVS Health (CVS)... pharmacy
BB&T (BBT)... bank
Citigroup (C)... bank
Target (TGT)... retailer

NEW LOWS OF NOTE LAST WEEK
 
Peabody Energy (BTU)... coal
Alpha Natural Resources (ANR)... coal
Consol Energy (CNX)... coal
Yamana Gold (AUY)... gold miner
Alcoa (AA)... aluminum

premium teaser

Another emerging market to put on your radar...
 
Chinese stocks are up big. And they're definitely in bubble territory. But another emerging market is quietly outperforming...
 

Recent Articles
Legal Notices: Stansberry Research LLC (Stansberry Research) is a publishing company and the indicators, strategies, reports, articles and all other features of our products are provided for informational and educational purposes only and should not be construed as personalized investment advice. Our recommendations and analysis are based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.

 

Readers should be aware that trading stocks and all other financial instruments involves risk. Past performance is no guarantee of future results, and we make no representation that any customer will or is likely to achieve similar results.

 

Our testimonials are the words of real subscribers received in real letters, emails, and other feedback who have not been paid for their testimonials. Testimonials are printed under aliases to protect privacy, and edited for length. Their claims have not been independently verified or audited for accuracy. We do not know how much money was risked, what portion of their total portfolio was allocated, or how long they owned the security. We do not claim that the results experienced by such subscribers are typical and you will likely have different results.

 

Any performance results of our recommendations prepared by Stansberry Research are not based on actual trading of securities but are instead based on a hypothetical trading account. Hypothetical performance results have many inherent limitations. Your actual results may vary.

 

Stansberry Research expressly forbids its writers from having a financial interest in any security they recommend to our subscribers. And all Stansberry Research (and affiliated companies), employees, and agents must wait 24 hours after an initial trade recommendation is published on the Internet, or 72 hours after a direct mail publication is sent, before acting on that recommendation.

 

© 2024 Stansberry Research, LLC. | Privacy Policy| Customer Service
Stansberry Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This website may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry Research, LLC. 1125 N Charles St. Suite 500, Baltimore MD 21202.