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Forget Stocks—Chinese Turn Bullish on Booze and Caterpillar Fungus From Wall Street Journal of January 30, 2012 Caterpillar fungus used to boost sexual virility is just one of the latest alternative assets for Chinese investors. The WSJs Deborah Kan talks to Dinny McMahon. BEIJING—For generations, Chinese men looking for a dose of vigor have sworn by a traditional remedy: fungus harvested from dead caterpillars, known in some quarters these days as Himalayan Viagra. Now Chinese investors are using the rare fungus to try to boost something else—their investment returns. The fungus has doubled in price over the past two years and the top grade now fetches more than $11,500 a pound, according to Fuzhou-based brokerage firm Industrial Securities. With Chinese stocks falling, real-estate markets flat and bank deposits offering measly returns, Chinese investors have been looking for help in strange places. Besides traditional medicinal products, they are plowing money into art-based stock markets, homegrown liquors, mahogany furniture and jade, among other decidedly non-Western asset classes. On a micro level, speculation has appeared, says Long Xingchao, president of the information center of the China Association of Traditional Chinese Medicine. The association says prices of traditional medicines, including red ginseng and false starwort, have surged since 2010, partly because of speculators. Mr. Long insists, however, that a price bubble isnt forming. Theres nothing to pop, he says. Newfangled exchanges are sprouting across China to take advantage of the excitement.  HYPERLINK /public/quotes/main.html?type=djnsymbol=600713.SH Nanjing Pharmaceutical Co. set up an exchange last year for trading traditional medicines such as deer antler. In November it extended hours so investors could trade when they get home from work. Expanding the hours gives investors more time to make a profit, the exchange said on its website. Exchanges have popped up that allow investors to b