The Chinese Bear!

The threat of a trade war with China is continuing to wreak havoc on the shares of some of China’s largest technology companies.

This means that the share prices are becoming very attractive!

Chinese stocks are in a bear market.   The 50 million dollar question is how much longer it will last.

It’s impossible to know.  However, I saw a similar scenario in 2015, in which Chinese stocks were down seemingly every day.

At that time, I bought shares of Alibaba (NYSE: BABA) at a price of $80, and it went down to $55.  Over the next three years, it would go from $55 to $211.

I understand the fear investors have regarding a trade war.  But I don’t think either Trump or Xi Jinping wants an all out trade war.

Regardless, the prices of Chinese stocks are continuing to fall.   Here are some companies to put on your radar if you want some exposure to China.  The percentages represent how much they are down from their 52-week high.

Alibaba (NYSE: BABA): down 27%

Tencent (TCEHY):  down 35%

Baidu (NASDAQ: BIDU): down 26%

NetEase (NASDAQ: NTES): down 49%

Baozun (NASDAQ: BZUN): down 33%

There is a secular trend in China regarding the emergence of the largest middle class in history.  That trend isn’t going away.

When you think about the economic impact this can have on companies, think Walmart (NYSE: WMT) and Home Depot (NYSE: HD).  These are two of the best performing stocks in history, and they were both disrupters that benefited from the emergence of the American middle class.

This story will play out over the next 25 years…not 25 days.

Until next time!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

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The $500 Fortune, Part 1

Here is a list of stocks.  For each stock, I have indicated what $500 invested in a given year would be worth today:

 

Apple: $500 invested in 1980 would be worth $216,289.21 today

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Adobe: $500 invested in 1980 would be worth $436,719.38 today

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Disney: $500 invested in 1962 would be worth $353,557.05 today

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Celgene: $500 invested in 1995 would be worth $235,493.90 today

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Monster Energy Drinks: $500 invested in 1995 would be worth $1,213,824 today

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Green Mountain Coffee: $500 invested in 1995 would have been worth $236,334 at the time the company was taken private in 2016.  You would have received $236,334 back from that initial investment of $500.

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Walmart: $500 invested in 1972 would be worth $1,135,937 today

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Amazon: $500 invested in 1997 would be worth $416,238 today

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Starbucks: $500 invested in 1992 would be worth $92,753 today

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Nike: $500 invested in 1980 would be worth $551,830 today

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What is important to know here – and I talk about this in my e-book – is that PERFORMANCE and TIME are the two most important factors in these examples of growth – not the specific amount invested.  Let me give you an example:

In 1981, you could have invested $10,000 in IBM and had you held onto it, it would be worth $174,101 today.  Not bad, right?  HOWEVER………….

Had you invested only $500 in Home Depot that same year, it would be worth $4,470,385 today!!

In my next post, I will list some stocks that are poised to perform in a similar way over the next 20 years.  Stay tuned!!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)