5 Sectors to Avoid in 2010

#4 China

I admit, I’m a China bear, and not the panda kind. I lived in Japan at the peak of its bubble, and it all feels the same to me. Where others see
growth, I see fraudulent data — it is not anywhere
near the 10% the Chinese government boasts, according to the International Energy Agency.

Chinese state banks are fueling an unsustainable boom similar to Japan in the 1980s, with money going into unneeded factories, as well as equity
markets. And it’s going to burst, probably in 2010, and, if not, then definitely in 2011. If you invest in Chinese ETFs to take advantage of the bubble,
use tight sell stops. But if you want to be prepared for the great China crash, your best bet is to short the ETF that best mirrors the domestic Chinese
economy and equity markets …

Trade: Buy puts on the PowerShares Golden Dragon Halter USX China Portfolio ETF (PGJ).

Learn more about why China
is one of the greatest shorting opportunities of 2010.

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