There I was, eating breakfast, looking out over downtown Hohhot, sipping Mongolian milk tea, and flipping through the China Daily. I was wondering whether it was worth it -- traveling more than 7,000 miles from Washington, D.C., to Inner Mongolia in search of the next big stock idea -- when I came across an article that made me believe it was.

But before I get to the contents of that article, I want to address something from The Wall Street Journalthis past weekend about which I've received a number of emails. Professor Elroy Dimson of the London Business School now argues that "the economies with the highest growth produce the lowest stock returns -- by an immense margin."

This makes no sense
According to Dimson's study, stocks in the countries that have produced the most dramatic economic growth over the past decade -- think China, India, Brazil, and the like -- have on average delivered just 6% returns to investors. That's compared to 12% returns in the world's slower-growing, developed nations.

The reason for this, of course, is valuation. Tech stocks such as Wave Systems (Nasdaq: WAVX), Red Hat (NYSE: RHT), Ariba (Nasdaq: ARBA), and RealNetworks (Nasdaq: RNWK) have produced negative returns since 1999, despite growing their revenues at more than 10% annually over that time, because investors bid their stock prices up too high. Same goes for stocks in emerging markets.

Investors see the eye-popping development taking place in China and Brazil -- and, yes, that development is real -- but they end up paying far too much to get a piece of it in their portfolios.

In other words, there's a valuation trap when it comes to investing in high-growth emerging markets. To capture their growth, you need to be willing to buy into them when their valuations plummet, which is usually when some kind of economic crisis strikes.

Did you say "economic crisis?"
In fact, we just experienced one of those times. Chinese stock valuations were absolutely crushed from October 2008 through as recently as May 2009, as freaked-out investors pulled their money out of any and all stocks they perceived as "risky."

We at Motley Fool Global Gains , an investment research service I co-advise, took advantage of that opportunity to pounce, recommending China Green Agriculture , American Oriental Bioengineering , and China Marine Food Group in rapid succession. As you can see, the returns thus far from the group have been worth the temporary discomfort of acting contrary to the conventional wisdom (though we did recently sell AOB, after becoming uncomfortable with some of the management team's decisions):

Company

Recommended in ...

Return since

China Green Agriculture

October 2008

+393%

American Oriental Bioengineering

February 2009

-3%*

China Marine Food Group

May 2009 Continued...