By Matt McCallAug 06, 2019
I put my cards on the table weeks ago and said that I’m all-in on stocks (and why). Today I want to be clear that the recent escalation of the U.S.-China trade war doesn’t change that.
Now, as long as President Xi Jinping and President Donald Trump keep going tit-for-tat, we’re going to see a negative reaction. That much is clear. But where people go way off the rails is when they sell stocks that have nothing to do with the situation. And that’s what we just saw!
Just like late last year and early this year, we are getting a great buying opportunity in a lot of stocks… and especially Chinese stocks.
Keep in mind that neither Xi, Trump, nor anyone else wants a long, protracted trade war. Ultimately, this is one of those short-term situations that we just have to get through.
In a couple years, we might barely remember WHY stocks sold off so badly. Just look at what happened in late 2015. China was the culprit then, too — stocks there had gotten overinflated… and finally, the bubble burst. Not only did Chinese stocks get hit; the U.S. and European markets were affected, too.
And by January 2016, people were wondering if the worldwide bull market was over:
“How China could trigger a global crisis”
– The Washington Post, Jan. 11, 2016
“George Soros Warns of Global Economic Crisis Amid Market Volatility”
– Fortune, Jan. 7, 2016
“The world has glimpsed financial crisis. But is the worst to come?”
– The Guardian, Jan. 24, 2016
Well, guess what… stocks didn’t stay down long. Ultimately, the S&P 500 gained about 10% in 2016.
And we saw the same bounceback in China, where the trouble began! Below you can see it play out on the stock chart for Alibaba (BABA), the “Amazon of China.”
The current action in BABA stock is eerily similar to what happened in 2015.
But keep in mind – Alibaba has little exposure to the tariffs. In fact, all through this trade war, it has kept growing revenues! When it reports its second-quarter earnings, Wall Street analysts are expecting earnings to gain 28% year-over-year, and revenues to gain 38%.
As one of the biggest stocks in one of the fastest-growing consumer markets in the world, I’m expecting great things from BABA over the next year. But I’m particularly excited about some other Chinese stocks that you may NOT have heard about.
You have probably read about the massive money that has been made during China’s economic boom. There were years in the 1990s and early in this century when the economy grew more than 14% annually. Growth remains robust – above 6% each year, which most nations drool over.
I saw it for myself in May, when I visited Beijing and Shanghai. When you see these vast cities, with throngs of people – and all the skyscrapers and transportation being built to accommodate them – those growth projections make a lot of sense. It’s much like the Great Wall of China (which I also visited and checked off my bucket list): a wonder of the world.
I know a lot of investors who missed out on the first round of big gains… but are still hesitant to put their money into China-related stocks. Even before the trade war, investing in a Communist country seemed unappealing. I get it. Although the economy is not nearly as Communist as it used to be – the government is unchecked.
But the truth is that you shouldn’t bet against China. And remember: Where there’s big government, there’s big spending. That’s key to the 10X growth potential I’m finding in Chinese stocks.
Here’s just one example…
When I researched China before and during my trip, I found that the country’s population is aging rapidly. You wouldn’t normally expect to see that in such a fast-growing economy. But 35 years of the “one child policy” took its toll.
Today, China’s median age is 37. By 2040, that number will have increased to 47. Only Monaco has a higher median age.
And, of course, as the population ages, they’ll need more trips to the doctor’s office. Healthcare spending is predicted to account for 17.1% of China’s GDP by 2028. That’s compared to 11.3% last year.
When you’re dealing with the kind of numbers China has, that’s a lot of people and money. And it creates huge upside for the companies involved.
The global tech market is just as hot right now. That’s where I found my latest stock play… and in fact, shares were actually higher during Monday’s sell-off. I revealed its name – and exactly why it’s a “buy” now – in my 10X Innovation Summit. We made sure to record it, so if you haven’t already, click here to watch the replay now.
The amount of progress we’re making as a society right now is staggering. Innovative companies are changing the world and creating value at huge rates of speed.
It reminds me a lot of the 1990s, when the internet came along and changed the world. Or even the railroad boom of the 1800s… or the automotive revolution of the 1900s…
It’s happened before – but it doesn’t happen every day. When you see a whole-new industry emerge like that – you’ve got to get in. And you have to get in before the crowd. That is what Early Stage Investor is all about.
So the other day, I sat down for a full interview on the subject. Our 10X Innovation Summit turned out to be a huge event, with over 17,000 attendees. Luckily, I had a great presentation for them (if I say so myself).
The best part was the preview of my new 10X Venture Portfolio. The strategy is what venture capitalists (VCs) use to create a basket of investments that could repay them by 10X (or more!)
It’s the same strategy that got me into Ross Stores (ROST). If you bought ROST on my recommendation, you’d have made 1,024%… plus 1,407% on Boston Beer Company (SAM), 1,495% on Advanced Micro Devices (AMD), and 2,040% on Ulta Beauty (ULTA)!
I say this not to brag, although I definitely am proud of these results. But I just want to show you that 10X gains really are possible. In fact, they’re expected…
P.S. One of the hottest stocks in my 10X Venture Portfolio is based in China… where it has cornered 25% of the e-commerce market.
I’m finding opportunities like that all over the world – in all kinds of industries, from cannabis to 3D printing. I’m encouraged at how well the 10X plays held up in this trade-war sell-off. And the best is yet to come. So be sure to check out my 10X Innovation Summit now.
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