I'm not against these widely known large new economy Chinese caps and I agree with John about their valuations.
But I think the vast majority of those who buy such stocks ignore the diversification with smaller caps.
Are those smaller Chinese stocks less reliable? No, they are not if they are fully PCAOB inspected like Nisun International for example. So, a few of them are legit, while their metrics are ridiculously low:
The aforementioned NISN trades at a P/E below 1, P/S and P/BV below 0.30, it is growing fast, and it has much cash in hand with negative net debt.
Plus, as I said, NISN has U.S. based auditors, fully inspected by PCAOB.
Thanks for the comment. I'm not familiar with the company and do certainly believe small caps should have a place in most portfolios.
Small caps, particularly on the smallest end come with significant unknowns but can be extremely rewarding.
In this particular case I'm trying to minimize idiosyncratic, company-specific risk by expressing view on beleaguered China Tech via mainly a liquid ETF.
It's all about risk-return I guess. $BABA may rebound 2-3x in the coming 12-24 months where NISN would probably rally double that amount on the back of the same tailwinds.
Hope this helps and I'll keep an eye on NISN in coming months!
I'm not against these widely known large new economy Chinese caps and I agree with John about their valuations.
But I think the vast majority of those who buy such stocks ignore the diversification with smaller caps.
Are those smaller Chinese stocks less reliable? No, they are not if they are fully PCAOB inspected like Nisun International for example. So, a few of them are legit, while their metrics are ridiculously low:
The aforementioned NISN trades at a P/E below 1, P/S and P/BV below 0.30, it is growing fast, and it has much cash in hand with negative net debt.
Plus, as I said, NISN has U.S. based auditors, fully inspected by PCAOB.
Thanks for the comment. I'm not familiar with the company and do certainly believe small caps should have a place in most portfolios.
Small caps, particularly on the smallest end come with significant unknowns but can be extremely rewarding.
In this particular case I'm trying to minimize idiosyncratic, company-specific risk by expressing view on beleaguered China Tech via mainly a liquid ETF.
It's all about risk-return I guess. $BABA may rebound 2-3x in the coming 12-24 months where NISN would probably rally double that amount on the back of the same tailwinds.
Hope this helps and I'll keep an eye on NISN in coming months!