I'll be going to Asia for the better part of the next month, and the phrase keeps running through my head as I prepare for my trip is: "In the land of the blind, the one-eyed man is king."
Yes, U.S. stocks have been mostly falling recently, but Shanghai has been one of 2018's worst-performing markets. While the Shanghai Composite Index rose some 2.2% Friday, it's down 10.7% over the past 12 months and fell 8% in June alone.
That hurts -- but I'd like to see even more red ink. Not because I'm short any China-linked equities, but because I missed the great moves in U.S.-listed Chinese tech titans Baidu (BIDU) , Alibaba (BABA) and Tencent (TCEHY) and would like to find entry points for those names.
And the real apple of my eye is hot Chinese stock iQIYI (IQ) . If that "little engine that could" gives back more of the roughly 80% gain that it's posted since premiering on the Nasdaq in March, I'll be all over it.
IQ is often erroneously referred to as the "Netflix of China," but it's actually much more than Netflix (NFLX) . The Chinese company has advertising streams that Netflix lacks, and IQ's corporate parentage (Baidu owns 69.6%) gives it a strong financial base despite today's losses. Remember, Netflix lost a lot of money for a lot of years, but that hasn't seemed to hurt its stock price. So, watch for streaming-entertainment dominance to come from Beijing rather than Los Gatos over the next decade.
Elsewhere in Asia, the Japanese automakers bear watching. Toyota (TM) , Honda (HMC) and Nissan (NSANY) group have mostly hit the brakes since peaking in late January, but again, I'd like to see even more of a pullback.
News regarding tariffs will continue to dominate how Japanese car firms trade over the next few months, but don't discount these stocks over the longer term. For instance, the Japanese are working just as hard as Tesla (TSLA) and the Big Three U.S. automakers are on autonomous and electric vehicles, but their work tends to stay somewhat under the radar screen. Despite Tesla CEO Elon Musk's tweets, not everyone is driving a Tesla Model 3. Instead, the Nissan Leaf remains the world's bestselling electric car.
Toyota is also doing some very interesting things with hydrogen fuel cells, with its hydrogen-powered Mirai already on the road in California. While Musk has called hydrogen cars "incredibly dumb," using the traditional power grid to charge an electric vehicle for eight hours just so you can travel 150 miles up and back won't help the environment all that much.
By contrast, you can fuel a hydrogen-powered car in less than 10 minutes using the universe's most abundant element, then get a better range than what electric cars offer. That's incredibly smart, although mass adoption will take years rather than mere quarters.
I'll be posting more thoughts about the world's most populous continent from on the ground in Asia next week in my Real Money columns. Until then, I'm just hoping for some decent in-flight movies.