Another Chinese Takeaway

Back in March I blogged about our recent Chinese takeaway. If you would like to remind yourself how it went then click here. It has been 3 months now since that blog, which I ended by suggesting that we would be ready to do it all again if the Chinese market fell sharply.

What happened next?

Well from the above chart you can see that making the decision to sell has indeed turned out to be a very good one. We had made 40% at the time we sold. If we had continued to hold our investment in China we would now be in profit by only 20%.

Only 20% I hear myself saying like that is a bad thing! But it would certainly feel bad having counted our chickens at 40% profit. The Chinese don’t invest really. They are gamblers. Investing in the same market as them would mean we too would be gamblers.

Do we go again then now?

One or two clients are asking me the question. Are we ready for a second Chinese takeaway. No is the short answer. Not yet is perhaps more accurate.

When a market suffers a deep shock like the one it has just been through, many investors tend to be wary. I don’t think there will be the same rush once again. But if the State Controlled market does indeed suffer a further shock, then I will do the following.

• Decide I’m ready for another Chinese Takeaway.
• Go to the kitchen drawer and pull out one of the four takeaway menus I have
• Spend 10 minutes or so looking through the options
• Then I will order the same thing I had last time

I chose the fund I invested in last time because it was Hong Kong based. I would certainly invest in the same fund again. Just like ordering Lemon Chicken for the umpteenth time.