Stock Market Analysis Video 7/28/2011
Cabot China & Emerging Markets Report Editor Paul Goodwin says it’s been a heck of a week in the stock market. Normally, we tell you to ignore the headlines, but lately, that’s been virtually impossible. Since February, the market has essentially been moving sideways. We’ve seen a lot of volatility with very little progress. Stocks discussed: SodaStream (SODA), Green Mountain Coffee Roasters (GMCR), Apple (AAPL), HollyFrontier (HFC) and Rosetta Resources (ROSE).
Emerging Markets Specialist, Analyst and Editor of Cabot China & Emerging Markets Report
A researcher and writer for over 30 years, Paul Goodwin has been a member of the Cabot investment team and editor of Cabot China & Emerging Markets Report since 2005. Under Paul’s stewardship, Hulbert Financial Digest rated Cabot China & Emerging Markets Report the #1-rated newsletter of 2006 with a 78.6% gain for the year, the number-one-rated newsletter of 2007 with a 74.1% return, and is currently the top-performing investment advisory for five years with a 20.5% annualized return as of 12/31/10. Cabot China & Emerging Markets Report was also named 2007 Investment Letter of the Year by Peter Brimelow of MarketWatch.
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Think it’s too late to make astounding profits in China?
Here’s why the second half of 2011 will be a great year for our favorite Chinese stocks.
I've seen the future, and its name is China.
Hello. My name is Paul Goodwin. I’m editor of Cabot China & Emerging Markets Report. While the rest of the global economy fell off a cliff during the Great Recession of 2008-2009, China's economy continued to grow by roughly 9% a year.
Now that the brutal global recession is finally behind us, China is ready to surge anew. With an unemployment rate of only 4% (compared to nearly 9% in the U.S.), its factories are humming and its increasingly affluent consumers are itching to buy.
As an investor, it's crucial that you have at least some exposure to China, which represents more than 10% of the world's Gross Domestic Product (GDP), but you have to know how to invest there.
Only about 32% of the huge Chinese population has access to the Internet, compared to 77% of Americans.
But it's not just technology. Name virtually any business sector and China plays a crucial role. Sure, China has been on a tear the last few years. But does it have the wherewithal to sustain the same breakneck pace? You bet it does.
According to the International Monetary Fund, over 95 countries are richer than China. Japan’s per capita income is $10,085. China’s per capita income is about $1,000. Impoverished nations like Libya, Lebanon, Romania, Gabon, Botswana, Azerbaijan, Namibia, Tunisia and Albania have higher per capita incomes than China. China's GDP per capita is only one-eighth that of the United States.
And here's the kicker: China has almost no debt per GDP compared to the West.
The upshot? China still has plenty of room for growth. What's more, the world economy is finally recovering. For investors, that means the biggest profits in China still lie ahead.
Does China face problems? Sure—problems that other countries would envy. China's savings rate is over 35%, while in America it's 2%. The goal of China's leaders right now is to reduce excess savings, by getting their people to spend more. And that says loud and clear that China will rack up sustained, rapid growth this year—and for decades to come.
According to the World Bank, about 20 million people in China (roughly the population of Australia) turn 18 every year.
Millions of Chinese workers are earning higher wages, joining the middle class and flexing their new consumer spending power by buying homes, automobiles, computers, and cell phones.
And they're traveling more, which explains why China now has more than 40 new airports on the drawing board.
China’s continuing rural-to-urban shift is one of the largest human migrations in history. City populations and boundaries will expand by 20 million in 2011.
It should come as no surprise, then, that China's infrastructure development is expanding like gangbusters—and it will continue to do so, for the next few decades. China is building new highways at a pace unseen since America's infrastructure binge in the 1950s and '60s.
In the next 20 years, China plans to build about 50,000 miles of major new road, roughly the equivalent of the U.S. interstate system. The World Bank projects that China's fixed assets—ports, bridges, and roads—will double every two and a half years for the next two decades.
Add up these figures and you have the formula for massive, sustained growth from now to 2025—and beyond.
I’m offering you the opportunity that thousands of investors have already accepted―a risk-free 60-day trial to my newsletter, to discover what it’s like to ride the rocket in Chinese mega-growth stocks.
Don’t miss this chance to receive 60 days—four bi-weekly issues—of Cabot China & Emerging Markets Report without risk.
As soon as I receive your acceptance, you'll have nearly instantaneous access to our current recommendations.
Best wishes with all of your investments,
Editor, Cabot China & Emerging Markets Report
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