Here's Why I Try to Avoid Chinese Stocks
There are two ironclad rules I follow when it comes to investing:
Let me be clear. I have nothing against China. My second rule isn't due to any specific negative experience I've had with Chinese stocks. And that's because I've never owned a China-based stock. I hold this rule because I simply don't trust the financial statements coming out of some high-flying companies based there. Fundamentals don't matter if you can't be sure the numbers are real.
I'm not in the business of betting against companies that I think might be trying to deceive investors. I've never shorted a stock in my life, and I likely never will. When I invest, I want to feel completely confident about every aspect of a company -- this means looking under the hood and making sure the numbers, management, and business model are sound. And being intimately familiar with its market. Maybe these guidelines mean I'll miss out on opportunities, but I'll also avoid major errors.
Source Fool.com
