TikTok Ban Obscures Chinese Stock Gold Rush

You are receiving this email because you signed up to receive our free e-letter the Wealth Whisperer TikTok Ban Obscures Chinese Stock Gold Rush 03/18/2024 No one wants to invest in China right now. The country’s stock market is teetering on the brink of collapse. And it is about to lose its biggest foothold in America -- TikTok. Yet, beneath its crumbling economy, military weather balloons and blatant propaganda tools lie some epic opportunities… …if you have the stomach and the knowledge. [Because as Jim Woods wrote in his newsletter last month:]( “China has been so battered for so long, that there is a lot of deep value here for the ‘blood in the ‘’red’’ streets’ investors.” And boy was he right. However, this battle-tested veteran didn’t recommend buying individual Chinese stocks. He was more interested in the exchange-traded funds (ETFs) like the CHIQ. And here’s why… SPONSORED CONTENT [Millionaires Will Be Minted OVERNIGHT]( Legendary tech futurist who predicted the rise of Amazon, Netflix, and Apple YEARS in advance now says: “The biggest, most profitable technological advances in the future will ALL stem from this single breakthrough. Millionaires will be minted overnight.” [He’s revealing EVERYTHING here.]( [Click Here to Read More...]( Predictable Manipulation China’s heavy-handed approach creates gaping economic inefficiencies. When markets falter, President Xi calls on his “national team” to prop up prices. $17 billion flowed into index-tracking funds in January as the Hang Sang fell over 13% while the CSI dropped over 7%. [Jim Woods saw this coming from a mile away.]( In late February, he highlighted the Chinese ETF CHIQ in late February, which has rallied rather nicely since then. This ETF focuses on the Chinese consumer, a recent passion project for the central government. You see, around 2018, when President Xi decided to smother his own economy, notable shifts were already taking place. The once burgeoning retail market had slowed markedly. Developers left cities abandoned, including weird copies of Paris (Tianducheng) and England. Source: Shutterstock So, Xi and co. shifted the focus to the consumer… which went terribly. For starters, a lot of the consumer wealth was tied up in real estate. Then you had a growing population of unemployed younger adults who didn’t have any money to spend. Once the pandemic hit, everything collapsed. That’s why it took China far longer to recover even a sliver of its former economy. While it’s not the growth engine it was during the early 2000s, the old girl still has some life left in it. As Jim pointed out, China’s consumer spending rebounded nicely in Q4 2023. Source: National Bureau of Statistics of China Combined with looser central bank policy, it was only a matter of time before Chinese stocks caught a lift. The resurgence may be largely tied to China’s desire to travel. After all, its people have been cooped up longer than any other country. But make no mistake, this doesn’t make China a long-term investment. Beyond what most people understand about China’s politics, there’s a little-known fact about how they treat foreign investors. Sponsored Content [Ex-Wall St. Trader Unveils Secret 'Banking Algo']( Once #1 on Wall Street, I ditched the suit for slippers to trade from home. Now, I'm revealing my "banking algo" that pinpoints the week's prime trades. Don't miss out on this insider knowledge - your portfolio could thrive with these insights. [Tap in now for exclusive access!]( [Click Here to Read More...]( Money in. Nothing out. When we buy a stock, we’re taking partial ownership in that company. This entitles us to a portion of the profits (or assets). That doesn’t happen with Chinese companies. American depository receipts (ADRs) aren’t actual shares of a company. It’s a note that the intermediary ties to shares of the company they own overseas. So, we can only own Chinese companies indirectly. But there’s another key feature you probably weren’t aware of. Many of the Chinese companies we, as Americans invest in, don’t pay dividends. In fact, a much smaller percentage of Chinese companies pay any dividends. Alibaba is a perfect example. Despite generating billions of dollars in cash every year, it doesn’t pay dividends. What do its managers do with the money? Other than squirreling away $80 billion on its balance sheets, they do share buybacks. Plenty of investors will tell you that’s even better than dividends. But you have no legal ownership rights in China. So, what is that ADR in reality? We’d argue nothing but paper profits at best, and air at worst. That’s why it’s flat-out dangerous to own shares of individual Chinese companies long-term. Any one of them can be nationalized at any moment. Chinese ETFs reduce that risk through diversification, similar to junk bond funds. Short of an all-out ban, like between the United States and Russia, the majority of the ETF holdings should remain intact. [Learn to Trade Like Interest Rates Don't Matter]( As February overflows with interest rate headlines, here’s a fresh perspective for you: Learn to trade like interest rates don’t matter. Whether you're a stock trader, options trader, swing trader, or day trader, this A.I. “Brain” is predicting market movements days in advance. [Don’t Miss This FREE Live Class to Learn How >]( [Click Here to Read More...]( Opportunistic Investing If China is so unstable, and capable of changing at a moment’s notice, how can investors uncover pockets of value? As Jim showed with his ETF selection, you can have some sector or thematic idea so long as you have the data to support it. China, like any large institution, isn’t going to change its broad economic policies overnight. As long as you study the general movements of the government, you can steer clear of the catastrophic zones and towards the diamond caves. Because when things look THIS bad, you know the opportunities are even juicier. But rather than try to run this maze solo, take this opportunity to [check out Jim Woods’ latest report on China.]( In it, he details the broad economic themes driving the Chinese government, and how to exploit them for gain. [Click here to explore Jim Woods’ report.]( To Your Wealth, The Wealth Whisperer Team About Us: Eagle Financial Publications is located in Washington, D.C. – only a few blocks from the Capitol. Our products have been helping investors build their wealth for several decades. Whether you’re a long-term investor or short-term trader, you’ll find the right strategy for you, including how to earn more steady income to spend now, preserve and grow your capital to enjoy later, and whatever other investment goals you have. 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