Playing China's Bubble

Or you can talk to people who've been around and who have their eyes open. Semple, a native Scot, has been in the investment business for almost 20 years. For nearly 10 of those, he's been investing in Asia on behalf of New York fund shop Van Eck.

Right now? "Value is a little bit in short supply," he admits, adding that in China "things are certainly overvalued in the short-run, but in the long run, they'll grow into their valuations."

They'll grow into their valuations.

Hmmm.

The latest game for the hot money, Semple says, is trying to find the next obscure Asian company just before a Wall Street bank initiates coverage. There are fast bucks to be made by those traders and hedge funds who ... um, guess correctly.

Example: Tradewinds, a Malaysian real estate company, recently saw its stock jump 25% overnight after Merrill Lynch (MER) began coverage with a buy recommendation.

"People are prepared to jump in and be aggressive about it," Semple says. "There's a lot of aggressive money around. In the $500 million to $1 billion [market cap] range is where you'll find things re-rated."

Maybe we should all just jump on board and trade this bubble. After all, you always make the most money right at the end of a mania. Just remember to get out in time.

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