CHN, the China Fund update

February 14, 2016February 14, 2016 Hamilton

The China Fund, Inc. is a non-diversified, closed-ended management investment company launched in April 1992. Its objective is to achieve long-term capital appreciation through investment in companies and other entities with significant assets, investments, production activities, trading or other business interests in China, or which derive a significant part of their revenue from China.

This is a proxy for the Shanghai index; here are two charts, then Sept. 2012 and now;

Since that time the fund has dropped about 50% and it is well on it’s way to our target. Originally we were looking for a simple A-B-C. That does not look to be correct. First of all the huge initial drop is very symmetric, suggesting a zig-zag. Secondly the retracement is close to where the b wave is. This points towards a double zig-zag. Furthermore , not that it matters now, wave 4 is probably a triangle.

So we have an a-b-c X a-b-c. The second b can be a triangle (in blue) or a running flat (in black) Both suggest a target of about $8 which is pretty well the low in this chart. This Google chart goes back a little further;

The low was on Sept. 4, 1998 at $5.50 and that is probable our target as it could be a 4th of previous degree. ( For EW enthusiasts; There is a clear overlap between 2 and triangle 4. That is obvious, but there is a school of thought that says that it is where the triangle ends that counts, and then there is no overlap). Bubbles normally also retrace back to below their starting point. The channel does support the notion that everything on this chart is one single 5 wave sequence.

Monday the market in China will reopen after having been closed for 9 days. The fund, however, trades in NY and has traded all this time. It is down about 4%, maybe that is an indicator;

By the way, for about 30 years, that is a lifetime in the world of investments, you would have had no capital appreciation on this fund, this is while China was the fastest growing economy over that time. And what about distributions? Well here is the answer;

Total investment returns reflect changes in net asset value per share during each period and assumes that dividends and capital gains distributions, if any, were reinvested. The net asset value percentages are not an indication of the performance of a shareholder’s investment in the Fund, which is based on market price.

India (IFN) and China (CHN)

September 24, 2012 Hamilton

A year and a half ago we posted this blog;

The question then was how can the World stock markets keep going up if China, the second largest economy is going down, with Japan , the third largest, still down about 75%. Here are the updated charts;

Clearly both indices are fallowing the anticipated path quite well, having dropped another , give or take , 20 percent over the last year and a half. For those that prefer the pure Shanghai composite index things are actually worse;

Not unlike the Nikkei, this one is down about 67% and moving lower. Clearly of the 16 years on display here the “anomaly” to use a mining phrase, occurred in 2007 with the index climbing more than sixfold. To hope that China is the one country that will pull us out of our present low-growth era is a leap of faith at best.

IFN, India and CHN, China update

July 14, 2012 Hamilton

First the old blog from Febr. 10, 2011, 17 months ago;

And here today’s charts;

The little red arrows show where and when these ETFs were on Febr. 2011. Both were at about $30 at the time, so now , a year + later they are down to roughly $20 which is about 30%. Both are probable in a wave 4 of a five wave sequence for wave C. We do not now how low they will ultimately go, but they should , at least , go below the ‘09 lows. IFN comes from $70 and CHN from $55 so both are down by more than 50%. Using the FXI as an alternative ETF (iShare) for China we get pretty well the same picture;Same with Shanghai DJSH

The FXI is down about 60% from the highs. It should, as a minimum, trade below $28 after which it will probable make new post peak lows. Shanghai has done very little over the past year but the EW count is analogous to the others. If China and India are making “soft” landings, investors in these indices probably do not agree.

India (IFN) and China (CHN).

February 10, 2011 Hamilton

Here are India represented by IFN and China by CHN. Not the best funds but they will do. Both went into bubbles 5 to 70 and 5 to 53. Both crashed but we know from experience that bubbles nearly always, or perhaps even always, correct to levels below their respective starting points, which has not happened yet and therefore should happen. Both counter-trends since the recent lows are very clear B-waves. One may not be finished yet but that is simple a matter of timing. So if these two appear so shaky what would happen to the rest?

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