Is 2022 the Year of Chinese Equities?

Andrew Giovinazzi

Yo Pit Crazies,

On a brighter note, things are turning around in China.

The lockdowns are coming to an end and life is returning to normal.

So will the CCP ease up on business and go back to being the Wild East for growth.

Frank Gregory, my partner in Capitol Gains thinks so.

And his insight has helped me craft 11 out wins out of the last 13 closed trades.

With that in mind …

Something is afoot in the Far East.

My sense is that the CPI will be the Vol event of Jun

One reason Chinese equities look interesting is that they mostly are outside of the halo of the consumer price index (CPI) number, which will be released this week.

They might be somewhat affected, but really China is its own dragon so to speak. Lately, the Chinese Communist Party (CCP) has softened its stance with respect to Big Tech in China.

I think the CCP got the message across, “You guys are big, but the CCP is everything.“

Game over.

But the winds blow in different directions and the disastrous lockdown policy in the big cities made the folks grumpy,so China can declare victory and try to put the economic house back in order.

There is nothing folks like better than seeing their stocks go up.

Take a look at KraneShares Trust China Internet ETF (Ticker:KWEB). This stock was the poster child for a beatdown over the last year, going from $100+ to just $20 a couple of weeks ago.

Note the big jump in volatility and the big move higher in the stock up near $2 today. The Chinese internet giants were some of the most valuable companies on earth until Beijing declared war on them six months ago.