Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

In a Decade, the World's Biggest Stock Will Be Chinese

Companies / China Stocks Nov 08, 2010 - 08:01 AM GMT

By: DailyWealth

Companies

Dr. Steve Sjuggerud writes: Ten years from now, the world's biggest stock will almost certainly be... Chinese.

At least that's what my friend and expert Asia analyst Peter Churchouse found when he recently set out to answer that question.


Four of the six companies that came out on top in his "Largest Companies in the Coming Decade" study were Chinese. Only one was American. According to Peter...

A handful of companies in this list could lift market cap by more than three times. A "buy and hold" strategy for some of these giants could produce very solid returns over the decade.

Fortunately, there's an easy way for Americans to own the Chinese giants. I'll share it with you today...

Right now, four of the world's 10 largest stocks are Chinese. A decade ago, that was unthinkable. No Chinese names were even close.

Today, the world's top 10 list of large companies includes names you'd expect – like ExxonMobil (the world's largest), Microsoft, Berkshire Hathaway, and Wal-Mart. The list also includes a couple names you might not expect – like Apple and commodity-giant BHP Billiton.

Rounding out the top 10 are four Chinese companies you probably never heard of. Most of these Chinese companies are near the bottom of the top 10 list today. But if Peter is right (and he used some very basic assumptions), these four Chinese companies could be in the top six in a decade... And one of them could overtake ExxonMobil as the world's largest company.

The four Chinese names are: oil company PetroChina, cell-phone provider China Mobile, and two major banks: ICBC and China Construction Bank.

You can easily own these Chinese names through an exchange-traded fund: the iShares China 25 Index Fund (FXI).

FXI's top three holdings are three of these names. And four of them make up about one-third of this fund.

At first glance, FXI doesn't appear cheap... It's trading at a price-to-earnings ratio of 16.8 and a price-to-book ratio of 2.6. (It pays a 1.9% dividend.) But it doesn't seem expensive at all when you understand the slowest-growing company out of the four increased its sales 15% a year over the last decade.

Peter isn't guaranteeing these names will become the biggest in the world, of course. And we can't know the future. We have plenty of other possibilities to ponder... Peter writes:

Will there be a new Google out there, coming from way behind the curve? Will something out of biotech be the next Google, a product of the genome project? Will we see some emerging market giants come screaming out of the chutes? Will some of the old contenders such as U.S. banks get a new lease of life, and catch the next wave of growth and valuation over the coming decade?

Chances are good for all of those. We can't know what's coming... But based on some simple assumptions, Churchouse suggests the future for Chinese blue-chip stocks is very good over the next 10 years... Invest accordingly.

Good investing,

Steve
P.S. In addition to FXI, you can also trade these stocks with leverage, if you're bold... You can own a "double-long" fund on the same index. That's the ProShares Ultra China 25 Index Fund (XPP).

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2010 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in