Dr. Sjuggerud: The most contrarian opportunity of my career

From Dr. Steve Sjuggerud, Editor, True Wealth:

Today, we’re staring at what could be the most contrarian idea of my career…

The potential upside is enormous… It’s literally hundreds of percent.

The only question to ask is this…

Will you step up and take advantage of it?

Most investors think of themselves as contrarians. But when it comes time to make a truly contrarian bet, they freeze. They can’t pull the trigger.

Do you have what it takes to go against the grain… and make enormous profits as a result?

Are you bold enough?

I’ve made a career of sharing out-of-the-ordinary investment ideas with my subscribers. These are usually ideas ignored by the masses.

That’s what gives us an edge. We want to buy when no one else is interested.

When an investment idea is truly hated, it is usually cheap… And it has the opportunity to move dramatically higher once the general investing public gets interested.

Today, the most contrarian opportunity I see – and maybe the most contrarian bet of my entire career – is in China.

The headlines about China are based on fear… a slowing economy, growing debt, and the potential for a currency decline.

People are focusing on the fear and missing the opportunity. The entire world has given up on Chinese stocks. And nowhere is that more true than here in the United States…

U.S. investors have no interest in owning Chinese stocks. In fact, they’ve been selling in dramatic fashion over the past few years. You can see this selloff on the chart below…

This chart shows the shares outstanding of the largest U.S.-listed China exchange-traded fund (ETF) – the iShares China Large-Cap Fund (FXI).

Shares outstanding for funds like FXI increase and decrease based on investor demand. So a decreasing share count means U.S. investors are selling out of China.

Since peaking in 2013, FXI’s shares outstanding are down 65%… In short, investors in the U.S. have zero interest in owning Chinese stocks right now.

You can see the same trend when you look closer – at individual companies…

Earlier this week, Bloomberg ran a story highlighting two more negative extremes for China’s market… (Of course, as a contrarian investor, I see negative sentiment extremes as a positive.)

The article explained that “short selling” – betting against the market – recently hit a peak in China. It also showed that an extreme number of Chinese companies hit “oversold” levels based on the relative strength index (RSI), which measures a company’s recent performance. (Of course, stocks often bounce after reaching oversold levels.)

The takeaway here is simple… And it’s one I believe in strongly…

The entire world has given up on the idea of owning Chinese stocks. Both here in the U.S. and overseas, no one is interested.

It doesn’t get any more contrarian than this. And that’s why I believe China could end up being the most contrarian idea of my career.

No one wants to own China – that’s why our upside is so large.

Today’s opportunity is simple… Buy Chinese stocks. I hope you’re bold enough.

Good investing,

Steve

Crux note: If you’re truly a contrarian, now is your chance… because another major change is about to happen in China’s market. One powerful group’s upcoming decision could send $1 trillion flooding into Chinese stocks. And when that happens, early investors could make hundreds-of-percent gains. You can find the full details right here.

× Subscribe to Crux
Want more posts like these?
Like us on Facebook?
Crux Contributors