"I believe the #1 rule for making money in the next decade is to get long whatever the Chinese are buying," says Tony Sagami in the Asia Stock Alert.
"China will need to consume an unprecedented amount of natural resources to fuel its red-hot economy," says the advisor who offers his speculations as to the most likely takeover candidates in three areas -- energy, metals and food.
"There's no doubt in my mind that China is on a buying spree. And I'm not just talking about oil, either. Fact is, the Chinese have a ravenous appetite for virtually all commodities.
"While I don't have any inside knowledge about what companies the Chinese have in their sights, I do know what industries are strategically important to their lofty growth objectives.
"China needs energy - and lots of it - so you can expect frenzied buying activity to lock up reliable supplies of multiple sources of energy. In my book, oil, natural gas, coal, and uranium are all key players. My #1 pick for an energy takeover: Cameco (NYSE: CCJ), the largest uranium producer in the world.
"After fuel, the next thing China needs the most are the basic minerals and metals to build things like roads, bridges, skyscrapers, dams, ports, and power plants. That means that China will need all the aluminum, copper, iron, potash, bauxite, zinc, tin, and cement it can get its hands on.
"My #1 pick for a base metals takeover: Companhia Vale do Rio Doce (NYSE: RIO), which is a diversified Brazilian mining company and the largest producer of iron ore and nickel in the world.
"With 1.4 billion people to feed, China has stopped exporting rice. Rice shortages have been plastered all over the news recently and while rice is a crucial staple of the Chinese diet, they also need pork, wheat, soybeans, poultry, edible oils, dairy, and seafood.
"My #1 pick for a food takeover is Sadia S.A. (NYSE: SDA), a Brazilian food company that specializes in poultry and pork - two of China's favorite protein sources."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
5-23-2008 @ 4:41PM
A Canuck said...
There isn't one chance in one thousand that the Chinese, or any one else (including any US outfit) would be permitted to buy Cameco. You can take that to the bank.
Even with a business friendly Conservative government in power in Canada, a divestiture bid for assets from a Canadian satellite technology maker was blocked by the government on grounds that the deal provided no net benefit to Canada. The reality was national security implications.
China has been pushed away from other deals in Canada in the past.
And there'd be holy hell to pay from the U.S. if the worlds largest and closest source of uranium (proximity) to the U.S. was sold to... communists! LOL
No, it will not happen.