The U.S., again, is the perfect example of what will unfold as China gets wealthier. From a general perspective, the U.S. is a very rich country. We have high wages, standards of living, high everything.

Yet, right now, the main focus of politicians has been on healthcare. The most commonly figure trotted out by the healthcare reform pitchmen is how much the U.S. spends on healthcare.

Frankly, I still haven’t figured out how this is a “bad” thing. If we have that much disposable income that we can spend so much on healthcare, that’s a good thing? We spend more on TVs, cars, energy than everyone else, but spending more on healthcare is somehow bad? Yes, there are lots of inefficiencies too, but having a lot of disposable income is not a bad thing.

So that’s why, with China’s GDP growing, it’s ongoing increases in national wealth, and everything else moving right along, the next big China boom is shaping up to be in healthcare.

Also, demographics are in favor of a genuine healthcare boom too. China is not just getting wealthier, it’s getting older. And that’s the perfect mix for a real surge in demand for healthcare. It’s the next natural progression.

The New China Strategy
That’s where we’re at right now. Most of the mainstream media see nothing but a massive bubble in China. Frankly, we’ve seen it and tracked it too. Bubbles, however, are truly great opportunities.

Yes, the bubble will end. It will end badly. And it will come when most investors least expect it. But if this is the next great bubble, it would be tough to sit on the sidelines for the next two, three or five years watching fortunes being made just for the sake of being “right.”

As my dinner guest rightfully pointed out, there just aren’t too many places where you can find businesses that double themselves each year for countless years ahead. But China is one of them and I can’t recommend staying away merely because everyone sees a bubble emerging.

After all, if a bubble is forming…all the better.

In a bubble, there will be opportunities to buy on dips and a genuine bubble will just accelerate the gains, push valuations far higher than they should be (and our gains right along with them), and since we have the tools (i.e. trailing stop losses) to ensure we don’t ride it all the way up and then all the way back down, why not.

Andrew Mickey is Chief Investment Strategist at Q1 Publishing

Courtesy: Q1 Publishing