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Bull in China (Shop) Stocks?

Past few years on Oscar Sunday, I have wrote blogs titled "and Oscar goes to..." and most of the times my prediction rate was above 50-75%. This year Oscar event seems to be creating more and more controversies and overall event seems to get boring (as compared to other choices available to spend Sunday evening). Nevertheless, I love movies so here are my predictions for this year's Oscar winners:

  1. Best Picture - Roma (this would be historic recognition to streaming world)
  2. Best Director - Alfonso Cuarón, Roma
  3. Actor in leading role - Rami Malek, Bohemian Rhapsody
  4. Actress in leading role - Glenn Close, The Wife
  5. Actor in supporting role - Mahershala Ali, Green Book
  6. Actress in supporting role - Regina King, If Beale Street Could Talk
Unfortunately I had not seen any of above mentioned movies (other than Roma) till now. No wonder there is less excitement about Oscars this year. The new category Academy tried to create (Popular movie) and then cancelled would have definitely gone to Black Panther. Let's see how my predictions do.
Next week is also interesting on international political front with Trump and Kim meeting in Hanoi and US-China trade talks deadline of March 1. President Trump will make sure that there is enough optics to show progress and will claim (which to some extent is true) that he is the only President who could make this happen. That brings me to the title of my blog. 
Definition of bull in a china shop: a person who breaks things or who often makes mistakes or causes damage in situations that require careful thinking or behavior.
You know who can match to this definition! But I am looking at this from different angle.
Let's look at "Bull in China Stocks"
Chinese markets are in downdraft since it reached all time highs in 2015 when Shanghai Stock Exchange index reached 5131 on Jun 1, 2015. Now it stands at just over 2800. Almost same level as S&P500 index. So in next 12 months, which index is going to do better? While S&P will cross 3000 this year for another 6-7% growth, Shanghai index will do even better. Once trade agreement is reached, Chinese stocks will continue its momentum since their valuations are still relatively low (avg PE of 11 compared to 15-16 for S&P). In next 12 months, Chinese stocks will return at least few percentage points more than S&P. So it should be almost no-brainer to have some exposure thru ETFs like FXI, KWEB or even stocks like BZUN, NIO, BABA, IQ (only after doing your own due diligence).
Enjoy the Oscars!
/Shyam





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