China Stock Experts. Where Are You?
An editor for a leading U.S. business magazine wrote me seeking my suggestions for good people to write, in English, about China's stock market. My response was to warn about the need to avoid bringing on any of the China investment amateurs who hold themselves out as experts.
I did not name any names for her and I do not plan on doing so here either, but I told her that those who are really in the business (and I know this through a very close relative who is really in the business) do not take these people seriously, nor do I. Respected stock analysts are those who devote their lives to it, putting in 60-80 hours a week and not becoming good until they have been doing it for a decade or more.
The Merrill Lynches and Goldman Sachs of the world have their China stock experts internally, but their advice is mostly confined to internal company documents provided to customers. Who out there is writing on Chinese stocks (even quasi-regularly) who knows whereof he or she speaks? Who, if anyone, do you look to for your China stock advice? Who are the true China stock experts out there writing in English?
Comments (20)
Read through and enter the discussion by using the form at the endJustin - August 29, 2010 5:00 PM
A good way to lose money anywhere is to listen to financial analysts of the sort you find on MSNBC. The smart money is already locked in when any stock picks are aired publicly, and it's generally the public that pays for the crash.
orangeking - August 29, 2010 5:34 PM
Andy Xie?
But the Shanghai/Shenzhen Stock Markets seems not to be where he pays his full attention to, or "devote their lives to it"...
AC - August 29, 2010 6:05 PM
Actually, the big investment bank analysts are mostly a bunch of clowns, too.
G.E. Anderson - August 29, 2010 6:09 PM
Any "expert" who bases his/her assessments on a listed Chinese company's financial statements should be avoided -- even the ones audited by the Big 4. (A few employees of Big 4 firms working in China spoke to me about this off the record.)
Then again, we should not be terribly surprised when the audited statements of a lot of American banks, Enron, Bernie Madoff, etc. failed to inform investors as to the shenanigans going on.
I have no names for you, but at a minimum, a good analyst should be based in China, speak and read Chinese fluently, pay frequent on-site visits and have frequent access to senior management and key suppliers. The advice of anyone who cannot offer this should be taken with a grain of salt.
gregorylent - August 29, 2010 11:54 PM
us passport holders cannot trade in shanghai .. but there is one dual citizen, italy/usa, who has traded for a few years .. interesting stories, to put it mildly
Hedge Fund Analyst - August 30, 2010 12:43 AM
I'm an analyst at a hedge fund here in China. I don't know of anyone I would recommend who writes in English that focuses on stocks. There are quite a few macroeconomists who are very good, but I don't think that's what your'e looking for. Andy Xie is a permabear who has been calling for an implosion since 2003, missing the incredible China rally in the meantime. Note I'm a bit of a contrarian investor, so I usually read sell-side recs solely to go against them.
Rick Pearson writes pretty well at TheStreet.com on China small caps listed in the US. But he's always talking his own book, and regularly ignores giant red flags. There are a few who write at Seeking Alpha, but they're probably the ones you're already avoiding.
Writing well on stocks is rare even in the US, and it takes years to build a reputation. You're not likely to find someone to the caliber you want very soon.
Alvin Chua - August 30, 2010 2:26 AM
China Law Blog this all depends what you mean by Chinese stocks. Please clarify whether you mean Chinese stocks listed on international markets, Chinese stocks listed in Hong Kong, Chinese stocks listed as A shares or Chinese stocks listed as b shares in Shanghai or Shenzhen, or whether you include Hong Kong and Taiwan as Chinese stocks and those stock markets too. You need to be more precise about what you mean you are being too simplified about what you want.
qingdao - August 30, 2010 3:05 AM
If what you have in mind is an American style stock market, China does not have one. It has something which journalists refer to as a "stock market". A rough analogy might be a book store. China certainly has large "book" stores, but once you get inside you learn very quickly that looks deceive.
darnoc - August 30, 2010 3:17 AM
I recall a Pettis piece on the topic of domestic markets in China. (link below) Key points include the current unbalanced investor base in China and its impact on the market, as well as the often significant role of non-economic players. Candidly, current conditions do not appear optimal for the creation of stock market 'experts.' Perhaps some exist, I certainly don't know any.
http://mpettis.com/2010/06/the-shanghai-market-isn%E2%80%99t-really-predicting-anything/
brad greenspan - August 31, 2010 6:07 AM
talk to maoxian.com. he's a chicagoan based in Beijing
Will Lewis - August 31, 2010 8:07 AM
I'm guessing that the editor's looking for a China market business journalist? The approximately 50-75% of the reporters for WSJ's China Real Time Report write about the markets, and are pretty dang good, but I couldn't name a specific one that jumps to mind. And there's great reporting at Caixin.
Hang - September 1, 2010 9:21 AM
There are very few/almost no stock experts around the world. Those working at Merrill Lynches and Goldman Sachs are stock experts? You must be kidding!
Claudia B. - September 3, 2010 12:25 AM
Exactly. I am always shocked to see some of the talking heads on CNBC in particular, talking about China stocks as though they have a clue. The TV shows are so desperate they are putting on China marketing people as though they are stock analysts. It's a joke.
daniel - September 7, 2010 12:58 PM
I agree, there's hardly anybody. Michael Pettis definitely understands China's economy, but he's about it of the people we see a lot of. The rest are just old China hands who have decided to go on TV or write for the magazines without having any real background in economics or stocks. Nobody I know listens to them.
Stock Picker - September 20, 2010 12:09 AM
Not sure if this qualifies, but Reidel Research, which focuses on emerging market, has done an excellent job with China over the years.
Options Trader - April 26, 2011 3:52 AM
We all know the blowhard you are talking about and we all agree with you. It's _____________[Deleted by editor] and you should just come out and say it and you and everyone else wish he would get pulled off the air. I have talked with friends of mine at the media to try to achieve this and they do not dispute his lack of qualifications but tell me he comes across well on TV to people just starting out and his controversy helps feed viewers. Who ever expected quality from TV in the first place is asking way too much.
Stock Market Guru - May 22, 2011 11:21 PM
There are plenty of China stock experts but they are not going to be going on TV or writing about it because they are all getting paid huge sums to prognosticate for the well-heeled clients of their investment banks/financial advisory companies. What we see/read are the poseurs.
Arunthe - June 4, 2011 2:18 AM
The people who know what they are talking about are in the back rooms at places like Goldman Sachs. The people who show up on TV or who write the columns are complete poseurs, who make a living not by providing investment advice, but my talking or writing about it. This is as true of China stocks as it is of any other country. Get over it.
Alexei - June 6, 2011 9:10 PM
Not on TV, that's for sure.
trade4target - July 24, 2011 10:02 PM
Good covered point, lots of people simply put something weired theories in front of public.
But it doesn't work i think because know one sure how it will going to happen
It looks like just coping ideas which someone has already written. I found even on
popular blogs guest bloggers bring same theories which I already know. I observed they
just try to spice up their article without knowing what really audience want to read.
trade4target