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China Investing: Like a Kid in a Toy Store

Editor's note: This is the second article in a series on investing in China. The previous topic was How Not to Invest in China.

Put on your ear muffs. Thirty-five years ago, Warren Buffett mentioned that he felt like an oversexed guy in a brothel. Ear muffs off. Three and a half months ago, I felt like a kid left alone in a Toys 'R Us store after dark.

Granted, Buffett's track record over the last 35 years is greater than mine over the past few months, but triple-digit gains are undeniably "above average." In March, I was offering to pay people if they gave me money and I lost it. I guess that's how market-bottoming can affect you.

Now, I'm optimistically cautious. There are still a lot of things that could go wrong. There are multiple problems still floating in the air in Eastern Europe, not to mention the great potential for commercial mortgage-backed securities to crash the boards harder and longer than the subprimes. That said, I still can't control myself when I see opportunities that make me feel like I did when I opened my 12-year old Christmas present, a Tyco 6 wheeling remote-control car that I proceeded to drive up and down the hotel hallways to my parents' dismay and embarrassment.

So here are four companies that bring out the kid in me again.

1. China Digital Communication Group (CHID) is irresistibly cheap, not to mention it just captured a veteran electronics CEO who founded a 3C electronic products manufacturing firm and grew it to hundreds of millions of dollars in revenue. China Digital, however, is trading at less than $10 million. Maybe I'm crazy, or maybe I just love electronics right now after the sector got crushed in price this last Christmas season.

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