Despite China's recent stock market meltdown, which has wiped off roughly $US4 trillion ($A5.5 trillion), there's still little there to reward investors willing to swim against the tide.
Like billionaire investment guru Warren Buffet, contrarian investors seize on knee-jerk reactions on the market by buying in contrast to popular sentiment, snapping up bargains in the process.
But Rupal Bhansali, chief investment officer, international and global equities at US-based equities firm Ariel Investments, says an emerging market like China isn't cheap enough to be attractive yet.
She describes contrarian investing as buying securities when they go on sale, but avoiding those that are offered "on clearance".
"(China's sharemarket) run up was speculative to begin with because the correction is not really clear valued enough in itself," Ms Bhansali said.
Chinese equities markets slumped 30 per cent at the start of July after having enjoyed a staggering 120 per cent rally over the previous eight months.
But despite Ariel's negative big picture view on China, Ms Bhansali said the company is finding some attractive stocks, like internet search colossus Baidu.
"It is the Google of China and only the very early innings of its success story is playing out," she said.
Last week Baidu's shares tumbled almost 8.7 per cent after the company reported earnings shy of most market expectations and gave a weak revenue guidance.
Ms Bhansali plans to exploit the market's short-term focus to uncover mis-priced companies like Baidu, whose true value will be realised over time.
"Because of this correction in the share price and the profit warning - which we think is temporal - it creates a very good set up for risk/reward for a long term investor like ourselves," she said.
And whereas Australia's big banks have typically been considered safe stocks during the past decade, Ms Bhansali has warned investors to steer clear.
She said traders have become obsessed with stability, which has led them to accept the certainty of low returns for the hope of low risk.
The company, which set up its first international office in Sydney in May, currently doesn't invest in any Aussie stocks.
"We do think the slowdown in the Australian economy will hurt the non-performing loan cycle," she said.
"That tends to hurt the banks disproportionately, so we are cautious of the banking sector."
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