Money Matters | Forget fundamentals when buying stocks in China, just follow the algorithm

If you are afraid, you've already lost. That's George's takeaway from the recent rally in Chinese stocks.

For nearly two decades he invested on fundamentals. He never put money in a stock without first ploughing through its financial statements and those of its peers as well.

"I give in," said George. From this year, he has left his investment decisions entirely to his computer. The machine calculates various momentum-related factors to pick stocks and he plays along.

Earlier, he used to split his portfolio between his picks and those of the computer. The reason for his new strategy: his picks have lost catastrophically to those of the machine, or in his words, to the might of insider information and policy changes in China.

George is not blind to the country's political reality. That's why he has spent more than two years building a computer model that will spot momentum, or in layman's language, the way the wind blows for a company.

"Trades in mainland Chinese companies are affected by insider information more than anything else," he said. "As outsiders, we are almost helpless. The hope is to ride on those who have inside dope."