Editor's note: This the first part of a two-part series.

David Semple, who runs one of the best-performing emerging-markets funds in America, was in Beijing recently for an investment conference. Like most such conferences in China these days, it was mobbed with professional investors looking for the next hot stock.

Semple crowded into a side room with 35 other managers to hear the pitch from one local company trying to raise its investment profile.

As the managers went through their PowerPoint presentation and described their business model, customer base, sales and earnings projections, Semple looked around the room at the other professional investors and made a startling realization.

"None of them was listening to the company," he told me last week. "They all had their laptops open. They were all too busy trading stocks ... for themselves, probably, as well as their clients."

Hmm ... Doesn't this sound a little like Silicon Valley, circa January 2000?

"There has to be a lot of opportunity," Semple says, hopefully, "because I'm competing against people who aren't paying attention to the

fundamentals."

Ouch.

How do you say "bubble" in Mandarin?

You don't need Alan Greenspan to tell you things are out of control on the Chinese stock market. Just look at it. The Shanghai Composite index has trebled in 14 months. And it has skyrocketed 65% already this year -- even after falling out of bed twice.

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.

In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.