Why I'm Buying in China

If you want to buy low and sell high, here's idea No. 1. Jade Art Group (JADA Quote) is off 92% from where it opened in January. Then, I wasn't interested because I had other, more inexpensive companies on my plate. Now, I'm a fan --- especially because the company deals with raw jade, and I consider this a luxury good. When good companies get cheap, I get greedy.

If you want a couple ideas to compare this to, look at Fuqi International (FUQI Quote), Zale (ZLC Quote), Blue Nile (NILE Quote) and LJ International (JADE Quote).

Fuqi is up over 300% in the last three months. What was once a cheap, good company is slowly but surely becoming more reasonably priced. We aren't there yet, but we are getting there. LJ International is more likely to go up than down in my opinion, as well.

In time, investors are likely to become more certain than uncertain, and companies that make wise decisions are more likely to continue to exist through tough times than those that do not. If you follow the sentiment of the headlines, you'll likely be buying high and selling low. Nobody really knows everything, but everyone is willing to tell you what they think if you ask.

If you entrust others to do your homework for you, how do you expect to beat them? Listen to those who beat the market and question everything all the time. Read what they say, not the headlines. Warren Buffett in his "Buy American. I Am" piece was on the same page I was. U.S. Treasuries were overbought. U.S. stocks were cheaper than they had been in a long time. He was speculating that at that point in time, stocks were a better investment than Treasuries.

Misunderstanding driving directions could land you in an entirely different destination and out of gas. Misunderstanding investment legends is no different. I would speculate that he was not saying that American stocks were the best investment at the time, just comparatively better.

He's also been quoted as saying: "The 19th century belonged to England, the 20th century belonged to the U.S., and the 21st century belongs to China. Invest accordingly." And so, that's what I'm doing.