Whenever people ask me about investing in China, which they do a lot, I ask them would they be so willing to invest in a bunch of U.S. companies they know absolutely nothing about? Then why are they so willing to invest in companies they really know nothing, in most cases majority owned by the communist government. I ask, do you really think you’ll be owning a piece of something? I ask them what it is they they would be buying? What claim they would have on their shares? Of course they can never say.
I say why not invest in U.S. companies benefiting the infrastructure build out in other countries? It’s good for the U.S., good for jobs, good for the economy, and good for the investor. Investing in China is good for China and a shit ton of risk for the investor. Caterpillar, for example, has more than doubled in the past four years. Anyone who thinks that’s not a respectable return has no business being in the stock market.
The catalyst for this post was Freakonomics article Forget Ferraris, Lock Up Your Bulldozer.
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