Buy Low, Sell High

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It’s generally accepted wisdom amongst investors that you should buy an asset when it’s low, and sell when it’s high. The most famous investor of all, Warren Buffett, is widely quoted for saying “be fearful when others are greedy and be greedy only when others are fearful.”

However, whilst the concept of buying low and selling high is widely understood, in fact the opposite usually happens. Many people get sucked in by the hype and buy at the top of the market and sell when the price drops. This is how markets work. For someone to sell when the market is at ridiculously high levels, there has to be someone ready and willing to buy.

So, if western sentiment towards China was valued like a stock, would this be the time to buy, or sell? I’m not saying that the ‘price’ can’t get lower than it is now, but I think we can all agree that long term investors would be looking to buy at these levels, and then buy more if the stock dips any further.

I’m not referring to currencies and stock markets which, judging by recent inflows, are already showing signs that global investors see China as a major buying opportunity for the long term. No, I’m talking about ‘China business sentiment’ in western countries which has fallen to an all time low, and getting lower. The more courageous entrepreneurs and even some large corporates are starting to make their move now to enter the China market while everyone else is looking the other way, distracted by negative media headlines and the public posturing of politicians.

It seems I’m not the only one thinking that this is the right time to ‘Buy China’.

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