The China Turn Is Real -- and Powerful

Stop underestimating this turn in China already. China was the primary driver of so many stocks, even as it might not have been a primary driver of the actual earnings. For example, Caterpillar (CAT) doesn't have all that much business in China, but it is the place that was most over-inventoried. Cummins (CMI), on the other hand, is all about China growth. So if you overlaid one on the other, you would see that Cummins is all about a model that can be blown out because of new, environmentally friendly diesel engines. Who knows how high this thing could go if the 12-liter Westport Innovations (WPRT) engine is to be used?

If you want to understand the power of the turn in China, look at Yum! Brands (YUM). We own it for the Action Alerts PLUS charitable trust. It did not report a good number. "So what?" this market is saying. It's China, and we now give companies doing business in China the benefit of the doubt....255 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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