Paul Goodwin, Editor of Cabot China & Emerging Markets Report, appeared on CNBC and discussed investing in China on Thursday, December 18. Goodwin had earlier issued a buy signal to his readers, ending his two-month moratorium on Chinese and emerging markets stocks. The top-performing investment advisory had been more than 50% in cash since June 2008 and 100% in cash since the middle of October 2008.
In his alert to readers of Cabot China & Emerging Markets Report, Goodwin said, “The time has come to crawl out of our defensive foxholes and start buying … but only a little.”
What caused Goodwin’s change in sentiment? Cabot’s proprietary market timing system. The system uses the Halter USX China Index as indicator of investment risk, and the Index recently climbed above both its 25- and 50-day moving averages. Meanwhile, Goodwin has been watching a couple of stocks that he thinks are ready to move, and so he’s recommending a buy on two Chinese stocks.
Goodwin added, “What the uptrend in the Halter Index is actually telling us is that investors, as always, are looking far ahead of where the global economy is now. As they try to peer into the future, enough of them are willing to bet that things will turn around. And they are finding stocks that are attractive at these prices.”
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