Monday, October 29, 2007

The Party Continues - Buying EWH

Selling VWO last week looks like a wrong idea now. It is now at 116, while I sold it at 109.45. So, I have become even more speculative now. I have bought EWH - the Hong Kong Index ETF. It is up 55% in 2 months, and I am buying it at its lifetime high. So I now join the army of China lovers.

Why buy EWH? Few reasons:
  • High likelihood that Fed cuts on Wednesday.
  • Since Hong Kong Dollar is pegged to US dollar, Hong Kong will follow US monetary policy. i.e. rates in Hong Kong will go down, whether HK authorities want or not.
  • Chinese Olympics next year - rally in China should continue till that time.
  • If China allows its citizens to invest in HK, HK will boom as it has been for the last 2 months.

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