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Author: PeterCundill Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14  
Subject: Predicting the ups and downs of FXI Date: 11/2/2007 12:59 AM
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I use to be an active trader way back, but has been such a long time since I have dabbled with anything. FXI is my first real play in many years. I bought some Jan. 2009 Calls with a strike of $110 back in Feb. of this year at $12.70 when the underlying was trading at approx. $90. That was around the time when the China market too a 10% dive. I was really lucky as it since then it kept on rising and I had recently sold it at $88, but I am still bullish on the China markets for a little longer and have traded in and out of different strike and duration calls. I am currently long some Jan. 2009 – 220 calls. So far I have just been trading on pure luck and momentum, really don’t know too much about the FXI other than the fact that it is composed of 25 large China companies. There almost seems to be no way of predicting the ups and downs of this FXI because even when the Asian markets have large movements up, overnight I would expect it to do the same, but most of the time it doesn’t.or at least not at the degree that the Shanghai and or Hong Kong markets did. It almost seems that it is more effected by the Dow markets. I use to trade both Hong Kong stocks and North American stocks and was able to have a pretty good indications as to how the markets were going to open judging by the close of the other and so I want to use this method to get an idea of the trading price of FXI, but it seems to be a different beast of its own.

Of course, given that Warren Buffet who has a philosophy of holding investments forever and he has recently complete pulled out of his China investments and Lee Ka Shing (Hong Kong’s richest investor) along with many fund managers in Hong Kong warning that the China markets are at a boiling point, it may be time to long some Puts instead of calls, but I don’t know if FXI would be the one to play since, it has only appreciated approx. 350% in the last 2 years where the Shanghai market has gone up more than 600% from what I can see.

Can someone shed some light on this?!?
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