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Oberweis China Opportunities Message Board

  • sgriskonisjr sgriskonisjr May 23, 2008 9:32 AM Flag

    Earth Quake & Olympics

    One might want to consider the recent events in China especially with the devastation with the Earth Quake and now with the Olympics a short time away to be closing factories, diverting water from Farms and food for the Olympics. This does not sound like a good economis future at least for the short term. Yes I agree the rebound is there for the long term. However wages are rising along with cost and as we all know that the market is also driven by sentiment. Any imput ?

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    • Define "the future". One of the challenges we have in the West (for those of us living in it) is our tendency to take the short view when it comes to investing. If you're like Turbo, you're obsessing daily on every fraction of a point. But mostly you're looking out 1 or 2 quarters max.

      China is the world's largest "emerging market" and in almost every category you can think of there is room for economic growth and expansion, whether in agriculture, infrastructure, manufacturing, etc. What China has not had until recently is a mature market for consuming many of the goods that have historically been exported overseas. But that is slowly changing, and one of the appeals of small-to-mid cap funds is that much of the new consumer demand will be met by regional companies in this market segment.

      The recent tragic earthquake has definitely been a set back for the people in Szechuan Province, though the government's response has been better than many expected. Certainly better than what the world witnessed with Hurrican Katrina in the Southeaster U.S. The reconstruction will fuel a number of markets and create demand for any number of locally produced items, and that should help the economy to some extent.

      The Olympics themselves will generate billions in tourism dollars, and probably create a wave of residual tourist activity for years to come, as millions of people experience China for the first time and want to see more. That was certainly my experience when I first visited in 2002.

      Anyway, my own view is long on China. The country has made amazing strides in so many areas and has many obstacles and challenges to confront in the future. But the Chinese people are very hardworking and have shown themsleves resilient and capable. It's worth betting some money on them, in my opinion.

    • I disagree with your implied statement that hosting the games will close factories or have a large negative effect on the economy.

      Evidence of this in the past?

      • 1 Reply to mr.rivers3
      • No question about the Olympics will generate dollars. I had read that because of the air quality problem many factories will be closed prior to the Olympics. Workers will have to be paid for sitting idle not to mention the water situation making a hard situation compouded by the Earth Quake. No doubt the potential is there and I am currently holding my position.

 
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