Recs

4

Another Week, Another Chinese Explosion

The market's appetite for Chinese stocks only intensified this past week.

China Digital TV (NYSE: STV  ) was only part of the explosion. China's leading provider of conditional-access systems in the digital-television market went public at $16 a share on Friday. It opened at $35 before closing at $28. That's a 75% gain for the lucky investors who got in on the IPO.

Meanwhile, a few speedsters on the American Stock Exchange made China Digital's eye-opening debut seem paltry in comparison. The exchange's three biggest gainers for the week hailed from China.

Stock

Last Week's Gain

China Architectural (AMEX: RCH  )

194%

China Shenghuo (AMEX: KUN  )

176%

Orsus Xelent (AMEX: ORS  )

62%

I have now spent threeweeks chronicling the trend of Chinese stocks that keep dominating the weekly lists of the market's biggest winners. The steady supply of fresh names isn't surprising, considering how many rapidly growing China stocks have gone public on stateside exchanges over the past few years.

The trend can't last forever, of course. In fact, the biggest loser on the New York Stock Exchange this past week was China's LDK Solar (NYSE: LDK  ) . Its drop temporarily cooled down China's scorching performance in solar-energy stocks -- though peers such as Trina Solar (NYSE: TSL  ) and JA Solar (Nasdaq: JASO  ) have roughly tripled since they went public over the past year.

Corrections are part of the game. The sharp moves in both directions tell you everything you need to know about the risks of investing in stocks that do business on the other end of the planet.

Still, can your portfolio do without the global diversification? I don't think so. You'll find more than just find market-thumping Chinese stocks in our Global Gains newsletter service. Other Foolish services -- Rule Breakers, Motley Fool Hidden Gems, and Stock Advisor -- also tout multiple picks that are based in China.

If you want to beat the world, it pays to bank on it.

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2/14/2012 4:01 PM
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