We need to get to, at least, $5. This is how that may happen. We will see.
Year: 2016
CHN, the China Fund update
The China Fund, Inc. is a non-diversified, closed-ended management investment company launched in April 1992. Its objective is to achieve long-term capital appreciation through investment in companies and other entities with significant assets, investments, production activities, trading or other business interests in China, or which derive a significant part of their revenue from China.
This is a proxy for the Shanghai index; here are two charts, then Sept. 2012 and now;
Since that time the fund has dropped about 50% and it is well on it’s way to our target. Originally we were looking for a simple A-B-C. That does not look to be correct. First of all the huge initial drop is very symmetric, suggesting a zig-zag. Secondly the retracement is close to where the b wave is. This points towards a double zig-zag. Furthermore , not that it matters now, wave 4 is probably a triangle.
So we have an a-b-c X a-b-c. The second b can be a triangle (in blue) or a running flat (in black) Both suggest a target of about $8 which is pretty well the low in this chart. This Google chart goes back a little further;
The low was on Sept. 4, 1998 at $5.50 and that is probable our target as it could be a 4th of previous degree. ( For EW enthusiasts; There is a clear overlap between 2 and triangle 4. That is obvious, but there is a school of thought that says that it is where the triangle ends that counts, and then there is no overlap). Bubbles normally also retrace back to below their starting point. The channel does support the notion that everything on this chart is one single 5 wave sequence.
Monday the market in China will reopen after having been closed for 9 days. The fund, however, trades in NY and has traded all this time. It is down about 4%, maybe that is an indicator;
By the way, for about 30 years, that is a lifetime in the world of investments, you would have had no capital appreciation on this fund, this is while China was the fastest growing economy over that time. And what about distributions? Well here is the answer;
Total investment returns reflect changes in net asset value per share during each period and assumes that dividends and capital gains distributions, if any, were reinvested. The net asset value percentages are not an indication of the performance of a shareholder’s investment in the Fund, which is based on market price.
CIX, CI Financial Corp. update.
The then, Sept. 8, 2013 and now charts, as usual;
So we had a sell at the end of 2013 at about $33. As you can see, no two charts are the same depending on the level of resolution (every minute, hour, or day) and the hi-lo kind of stuff. On the Bigchart a triangle seems to fit, whereas on the Globe&Mail one a running flat seems more appropriate. The actual high was around $37 some 5 months or so later. Anyway we are already at $27 so all is well that ends well.
This mutual fund company is, I believe, 39% owned by Bank of Nova Scotia, so it does not have to go as low as, for instance, AGF (it is in this blog). Nevertheless their world has shrunk. It used to be that the client makes, say, 7.5% and the company 2.5% and everybody is happy. Now that is more 2.5% for you and 2.5% for us and nobody is happy. The business is more difficult due to all sorts of regulations and on top of that the trust is very low. We have a higher regard for the guy at Home Depot selling vinyl siding than we do for these guys and gals, perhaps for good reason.
Look for about $15 at the very least and then just under $10, the 4th wave of previous degree. Mutual funds may become just as popular as the Polaroid camera by the time this bear is done.
We add two funds chosen randomly and invite you to the website if you wish to test the 50/50 proposition. We have a bond and equity fund, the latter is guaranteed which means it is life insured at a certain age, which ties you to it. Would you care to own them?
If you look at the one on the left with a MER of >5% it is probable 3% plus 2% for the guarantee. Looking at the chart on the right, –click on it to enlarge- it looks very much identical to the TSE which makes me wonder if this is just another “closet-indexer” that does not deserve such a high management fee. We do not need any help to shrink our portfolio! Your investment advisor receives about 1/2 maximum of the MER, which is why he, not you, has the yacht.
MRK
We use a semi-log scale. This makes the rise from the early eighties look like a perfectly straight channel. We are not entirely sure of the early part of the EW count, but we are pretty sure that the 4th wave is where we think it is. Also the orthodox top might be to the left of what is shown but this does not materially affect the analysis.
First note that this stock never fell back to the 4th wave of previous degree, this simple means that it may still do that! The mess up there over the last 15 years is simple a series of a-b-c’s as far as we can tell, that is corrective and not impulsive so there is little reason to believe that we are in a new bull market. Taking all that into account a target of $15 emerges.
HPQ may have a similar structure.