... . . A Real Live Play. . ....
To keep on-topic here: I see China ETF plays as really attractive at this level. I believe it is too early for their earnings to have been so greatly affected by the downturn that they will not pay dividends. If dividends are down by half from last year, the current price could still return a 50% near-term gain when dividends are distributed, in addition to stock price. China has not seen the weakness of Brazil or others. I guess everyone is addicted to cheap China made goods. You know my favorites...GCH and CHN. In India, IIF and IFN are still interesting, but I am not nearly as confident in them as I am in China at this point. I would steer clear of Brazil and Russia, as they are immediately seeing drastically sharp downturns.
I peered through more than a dozen interim reports of major holdings a few months back, which showed estimates were nearly double the earnings of the prior 6 month period. I keep trying to find the weakness and am just not seeing it to be as bad as what it would take to reduce 08 dividends to nothing. Thankfully, Chinese corporations still have enough integrity to work toward building shareholder value and faithfully pay out dividends (unlike nearly every U.S. corp.).
Remember, this is a end-of-year play only. Getting in really cheap at this level...then holding only until dividends are declared. I think they will pop all at once...and will be very difficult to chase. Also, they are extremely bouyant on any recovery we may see...should 7700 hold and we can begin to rebuild. Whether or not they can return to heights of 6 months ago, will depend on how long a global economic recovery may take. Don't overhold!
Near-term, ETF share prices have greatly outperformed each significant upturn....and I see no reason why that would change. Cramer has found China ETFs interesting...finally. He should have been there 4-5 years ago and tripled his money on them....but at least there is still some bounce left for he and his minions. I wouldn't hold them past dividend payout, as foreign ETFs will drop sharply oncde the slowdown is seen to affect 09 performance of each fund's holdings.
All caveats in force. You know the drill. Seek professional guidance for all investment decisions.
Rande Is |
