What to do with Peerless Manufacturing? Is China a Buy?
Yes, a two subject blog post - wrap your brain around that for a bit!
I recently wrote an article on whether or not you should be thinking of leaving Peerless Manufacturing in the dust which can be found here.
I also wanted to further expound on the idea that I feel Chinese companies are near or at the equivalent of March 2009 lows in comparison to US stocks. I don't think you can throw a dart and be correct, but I largely expect a greater than 50% chance that if you do your homework and pick out a few Chinese names they will vastly outperform the S&P 500 over the next 2-3 years. With that being said, a few days ago I set up a tracking portfolio, much like UltraCrap, UltraOlympus and UltraRetirement are. It will not be actively traded (other than to possibly add another name). It is comprised of roughly 180 companies that are either based in China or operate a very significant portion of their business in China. My theory is that in 2-3 years this portfolio will be showing something around 65-67% accuracy with approximately 4000-5000 points if not more. This portfolio will serve to see whether I was right about Chinese stocks or whether you can all point and laugh at me in the end.
I have named the new tracking portfolio UltraChina and it will serve to track my "Chinese credibility" over the next 2-3 years. I think you'll see some losers in here, but I largely expect the winners will dwarf the select few duds. Please keep in mind these 180 picks are all Chinese companies and didn't go through my usual screening process (i.e. I don't care what they do or if they make money.. they just needed to be based in China or do a large amount of their business in China).