Jeremy Schwartz, CFA, Global CIO at WisdomTree joined Benzinga's Premarket Prep to discuss the boom in China stocks like BABA and PDD.
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00:00Jeremy, what about this China trade?
00:03Because this has been nothing short of incredible.
00:06The comeback here in these stocks, you know, I almost feel it's unprecedented.
00:10I don't remember a 30% rally in a week in China for a long time, and I haven't traded
00:16in 24 years.
00:17I'm sure it's happened in there maybe during one of the crisis situations like the financial
00:20crisis or something, but just boom, like they come out, a little bit of stimulation happening
00:26over there for their stocks and bang, you know, 30% a week.
00:30Is this sustainable?
00:31Is this a real turnaround story or is this just another one of those rug pull situations
00:35where they rally for a few weeks and then they pull the rug out and they, you know,
00:39harpoon their own stocks somehow from a geopolitical perspective?
00:42What are your thoughts on the recent China rally?
00:45Now, you know, you'd say it's, it's, it's, mentality is like I'm about to relay that's
00:49why they're where they are.
00:51But I do think it's, it's a tough place to be a strategic long-term investor.
00:57You know, now this community might be, you know, be able to quick move in and out and
01:02ride these trends.
01:03You know, you have, if you have a more trading oriented mindset and you can get in and get
01:07out.
01:08I, you know, this, will there be a meaningful sentiment change?
01:13I mean, certainly you've got Tepper going on CNBC, say buying everything and that, and
01:18again, he's a very nimble investor.
01:20So, you know, he could be in and they could be out quickly.
01:23You don't know how long he'll be in the trade for.
01:26They certainly are, you know, depressed.
01:29BABA was like the premier growth stock when you saw it going back to 300.
01:32It was, you know, it was one of the, it was competing.
01:35All those China tech companies were competing with US tech leaders and actually outperforming
01:39them for a while.
01:41And then they had self-inflicted wounds where they started talking about common prosperity
01:44and the Chinese leaders were taking actions against them.
01:48They're going to have, you know, the, the Alibaba's fintech arm go public.
01:54They clamped that down.
01:56There's all these questions.
01:57Where's Jack Ma?
01:58All that stuff.
01:59I, I believe as a long-term play, I'd rather actually be in India and Japan.
02:05I mean, both for different reasons.
02:07Japan is just as much cheaper as a value market as a play on Asia, global growth, India, that
02:13long-term consumer best growth profile around be there for decades.
02:18India is where I really want to be over the long-term, it's priced that way.
02:22And so it's not a cheap market, but it's where I want to be in the long run.
02:26China is, we're not, we're not overly positive the stimulus will change their economy.
02:31You know, we think that they're trying to reverse the extreme pessimism, but they've
02:39got challenges both from an economic standpoint, geopolitical standpoint.
02:45There's a lot of uncertainty over the next few years.
02:47So I'm not chasing this trend.
02:49I'd rather probably lighten even on that move.