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TMFMmbop (96.47)

Anthony Bolton Coming Out of Retirement

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December 17, 2009 – Comments (5)

This is a bit of an old story, but it broke while I was in India and it's, I think, been underreported. But Anthony Bolton, the Fidelity Special Situations Fund manager who earned nearly 20% annually over a 29-year career, is coming out of retirement to launch a China-focused investment fund in 2010. He gave his reasons for doing so in a recent Financial Times editorial. Among them:

The situation in China today is very similar to that in Taiwan or South Korea during their fast growth phases 20 or so years ago and in Japan before that. However, growth is occurring on an even bigger scale because of the enormous size of the Chinese population.

Jim O’Neill, head of global economic research at Goldman Sachs, has said: ”What is going on in China remains, quite simply, the most remarkable and important economic story of our, and possibly our children’s, generation.” I agree.

Because of the scale of what is happening and the effectiveness of a centrally-run economy that other emerging markets do not enjoy, the world may never see anything like this again.

Buy China. Be careful, but buy China.

5 Comments – Post Your Own

#1) On December 17, 2009 at 3:02 PM, russiangambit (29.94) wrote:

TMFMmbop, you just went to China recently. Is it a bubble or not? It is hard to trust any information coming out of China. On one hand you hear about all this potential, on the other hand there is this huge stimulus, reportedly a lot of  new but empty buildings. And third, I think Westerners simply don't understand China and for that reason are bound to misjudge it.

I can't remember the hedge fund manager name (Jim Chanos?) , He is shorting China. Yet you have so many funds currently opening to invest in China. 

Plus Chinese stock market is not allowing shorts, so its turns are very abrupt, both up and down. A scary thought to be long chiense sotcks and loose 20% in 3 days, which is quite a possibility.

I researched quite a few Chinese stocks last year. But my problem always was - can you trust the information they provide? And they provide very little. And on top of that you always heat all kinds of rumours, like this founder is actually a swindler or has questionable connections and so on.

 

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#2) On December 17, 2009 at 3:49 PM, TMFMmbop (96.47) wrote:

Chanos is shorting China. There are parts of China's economy that are unsustainable right now -- I think about the government-influenced bank lending this year for example -- and those parts could lead to volatility.

That said, long-term, given the people in China and it's drive to development, I think investors will be richly rewarded if they have exposure here. There are many fundamentally great things about the country. But don't pay too much to own China. That would be a mistake.

So as I said in the post: Buy China. Be careful, but buy China.

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#3) On December 17, 2009 at 10:52 PM, vitrified (99.17) wrote:

Thanks for sharing this news.  I have an IRA with Fidelity and have been gradually moving money out of Fidelity mutual funds to invest in Global Gains picks, though I will look seriously at rolling some of those funds into Bolton's China fund when it opens (sometime in 2010, I expect) both to watch where he is investing and on account of the returns on his past performance.

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#4) On December 18, 2009 at 11:18 AM, BoomerBull (70.30) wrote:

I read that the growth in numbers of middle-class Chinese will mean phenominal growth in the internal consumer market and internal infrastructure to support this expanding class. This means a shift from export drivers of the past. Do you agree? A report last night on TV said the one-child policy and aging population in the future will result in the U.S actually becoming a net exporter to China. Thoughts?

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#5) On December 18, 2009 at 9:38 PM, russiangambit (29.94) wrote:

Mish has this article on China. Is he completely off base?

 http://globaleconomicanalysis.blogspot.com/2009/12/china-faces-crash-scenario.html

Which Chinese stocks do you like right now?

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