Best Chinese Stocks: Buy, Hold Or Fold

Best Chinese Stocks

Best Chinese Stocks

Updated Feb 2023

Instead of fixating on identifying the best Chinese stocks, wise investors would be better served by focusing on the positive trend in America instead of the neutral trend in China, which could quickly turn negative. It may be premature to identify the top-performing Chinese stocks under current circumstances.

The rhetoric surrounding China is escalating rapidly, with calls for everything from reparations to outright war gaining traction. At this juncture, the validity of the arguments against China is largely irrelevant; the media can shape the narrative, and once the tone has been set, the public may become increasingly fervent in their calls for action.

Although some Chinese stocks may defy the negative trend and perform well, we believe it is not worth the effort to search for them amidst a sea of uncertainty. Countless attractive investment opportunities in the US market are worthy of consideration.

China’s lack of remorse does not bode well for its prospects. They seem to believe they can buy their way out of this situation, but we believe this approach will fail on a grand scale.

unemployed workers on temporary layoff

Best Chinese Stocks: US Stock Probably Better

At first glance, this chart may be alarming to some. Still, upon closer examination, it becomes apparent that a quick rebound has followed the significant spikes in unemployment in the job market. However, the current situation is different, as businesses increasingly turn to automation, diminishing the importance of job growth. Furthermore, the Federal Reserve has flooded the market with more liquidity than ever before in its history.

In the stock market, profitability is the primary concern, and we believe these companies will bounce back to profitability much sooner than the experts predict.

Goldman Sachs remains optimistic about the possibility of a V-shaped recovery from the impact of the COVID-19 pandemic, drawing a comparison to the 1981-1982 recession, which resulted in significant job gains once the labour market rebounded.

According to Goldman, the current shutdown of the labour market is similar to the Volcker recession, a “man-made” recession resulting from deliberate measures taken by the Federal Reserve to curb inflation and anchor inflation expectations. Similarly, in response to the current pandemic, economic policymakers are taking steps to discourage some economic activities in favour of public health priorities.

Goldman Sachs analysts highlighted that similar industries were affected during both the Volcker recession and the current situation, and therefore, there is a strong case for a robust recovery in the job market once the pandemic subsides.

We agree with the general assessment of the analyst that this crisis was “man-made”, and therefore, the primary drivers of the economy are likely to recover faster than projected. The deliberate measures taken by economic policymakers to curb the spread of COVID-19 have impacted the economy significantly. Still, there is a high probability of a strong recovery once the pandemic is under control.

bullish neutral bearish chartmarket anxiety gauge


We are 99% sure that a “mother of all buys” will be generated shortly; the anxiety index is still stuck deep in the zone of madness, and the next pullback could push it right to the very edge.

The secondary indicators posted below are trading in the extreme ranges and bullish sentiment while surprisingly high given the chaos is still below its historical average. Neutral sentiment rose, but it’s well below its historical average. To trigger this buy, we only need neutral sentiment to test its recent lows or for our weekly indicators to move a bit more. Market Update, April 7, 2020

If the Dow trades in the 19,800 to 20,800 ranges, it’s almost guaranteed to trigger the MOB (Mother of all buys) signal as the indicators on the weekly charts have moved deeper into the oversold ranges.

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