Tag - Shi

Baron Philippe de Rothschild once said “the time to buy is when there’s blood in the Streets.” China is still in the early recovery stages of one of the most calamitous earthquakes to ever rock the mounting Asian empire, causing a broad-based pull back in Chinese shares, and uncorking investment opportunities from the rubble.

“It’s happened time and time again throughout history, whether it be the earthquake in China or the flooding in New Orleans or the World Trade center — there is generally a market consequence,” Jim Trippon, editor in chief of the China Stock Digest newsletter, said in an interview with SmallCapInvestor.com. Trippon runs the largest equity investment research firm in mainland China and advises corporate pensions, private trusts, and high-net-worth families on their China investment strategies. “Anytime that happens, at least for the short term, there’s a pull back in all stocks, which generally creates a tremendous buying opportunity if you can differentiate between the winners and the losers.”

Even though the earthquake has shaken the Sichuan Province, the region only comprises 4% of China’s GDP, meaning there is marginal downside from a macroeconomic standpoint.

As China rebuilds, commodities, companies that produce commodities and companies who are in some fashion tied to commodities will be a lucrative space for investors to park their cash on account of this earthquake. China’s torrid growth of 10% on average has been a major source behind the skyrocketing commodity prices as the country has sought to build infrastructure. The recent earthquake magnifies that effect. Any building materials — oil, steel, timber, aluminum, copper and cement — needed to reconstruct China will benefit. 

“What’s happening right now with the earthquake is that we’re seeing demand continue to go up because they’re rebuilding,” Trippon said. “What that means for us as investors is we can realistically expect further increases in commodity prices across the board.”

The drybulk shipping space is one that will benefit from the earthquake and . . .