A rising tide lifts all boats. That's a popular expression. I'm here to tell you that it's bogus.

A rising tide doesn't lift all ships. It doesn't help the boats that have holes in their hulls. It doesn't help the vessels with anchors that can't be loosened from the ground. It certainly doesn't lift the motorboat that is puttering away on the wrong side of the dam.

So please don't tell me that all ships rise with the water. If anything, the rising tide can spell a timelier demise for flawed boats.

So that's why they're called junks in China
Bashing an axiom to bits finds me stamping my passport in China, where the water is certainly buoyant. Even with the late-February swoon, China remains a red-hot market, hitting fresh highs.

Some of the trends are encouraging:

  • The economy is booming, growing at a better than 10% annualized clip in recent years.
  • Moves to strengthen the yuan versus the dollar could make Chinese stocks more valuable to stateside investors.
  • China's still early in the development cycle.
  • The 1.3 billion-strong citizenry is starting to enjoy disposable income.

The handful of Chinese stocks that currently trade on stateside exchanges have served up some amazing opportunities for growth stock investors. The Rule Breakers growth-stock newsletter that I write for recommended its sixth Chinese company last week. Yes, six! One of the earliest Global Gains newsletter selections is a fast-growing company specializing in educational services in China -- New Oriental Education (NYSE:EDU) is a growth story that writes itself, really.

So if the rising-tide analogy should ever tie itself to a geographical pier, China would be the ideal port of call. The climate is perfect. And with so few publicly traded equities, one would expect the companies that have made the cut -- trading freely in this country -- to be the cream of the bumper crop.

Sorry. Wrong answer. There are plenty of holey hulls out there. You see it in the way the market is knocking down shares of Xinhua Finance Media (NASDAQ:XFML). The stock went public two months ago at $13 a share, and the shares are now fetching around $7.  

How can that be? Xinhua is a recognized media brand. Financial enlightenment in mainland China has all the makings of a slam dunk, I guess. However, the stock was beaten down in recent weeks with investors fretting over executive defections, lawsuits, and financial concerns.

It's so tempting to approach Xinhua as a turnaround situation, but there are more red flags there than in Taiwan on Double Ten Day.

More grounded whalers
Then you have KongZhong's (NASDAQ:KONG) slide earlier this week after posting disappointing quarterly results. KongZhong has the misfortune of being stuck in a bad sector. Providing mobile value-added services seemed like a great idea until the government and cell phone service providers began cracking down on the niche. The crumbling fundamentals have sent pioneers scrambling into growth areas like online gaming and Web portals. In the case of Tom Online (NASDAQ:TOMO), its final resting place as a public company appears to be back in the belly of its parent company.  

Then you can be in the right place but with the wrong company. Ctrip.com (NASDAQ:CTRP) has been on fire as the fast-growing provider of online travel agency services. Naturally, travel is a major theme in China. More money means more leisure time. More money means more corporate travel, too. Ctrip is the right company in the right place. Where's the wrong company? That would have to be smaller rival eLong (NASDAQ:LONG). It hasn't been as lucky. eLong is trading near its lowest point in two years after this month's posting of uninspiring results.

So don't tell me that a rising tide lifts all boats. It's clearly not the case. Maybe that's why, in China, some of those grandly decorated yet slow-footed boats are called junks.

Global Gains lead analyst Bill Mann departs for China, India, and Taiwan on June 2 in search of new investment opportunities in some of the world's fastest-growing economies. Get updates and analysis live from the field by sending Bill an email at BillTrip@Fool.com.

Tom Online has been singled out as a Stock Advisor recommendation. Ctrip is a Hidden Gems selection.  

Longtime Fool contributor Rick Munarriz feels that China still offers great opportunities for growth investors, as long as you're buying the right companies. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.