The long term fundamental case for China has been made many times in many places but the decline is a good reminder that the stocks will be cyclical and volatile even if the big picture story remains in tact.

The best way to avoid getting badly hurt from another implosion is simply to not own too much. I currently target a 2% weight and I could see getting as high as 5%. That's 5% and I absolutely love the theme. I loved the theme during the 14 months I had no exposure. As great as something might be you can still get it wrong. Being wrong is not as bad as what the consequence of being wrong might be.

Speaking of themes I love there was an interesting segment on Squawk Australia on Tuesday morning (Aussie time) with Steve Johnson from a firm called Intelligent Investor. The end of the conversation was about his opinions on Australian Infrastructure funds/stocks. He said he currently likes four or five out of the 20 that he covers. Twenty? Macquarie and Babcock & Brown each have quite a few funds listed in Australia and there are a couple of others.

Infrastructure is just as important a theme as China (obviously there is overlap). The money is going to be spent on infrastructure and despite how much some of the stocks and funds went down the money was never not going to be spent. The US is not quite at the investment saturation point that Australia might be (the US may have 20 funds out there to pick from but the Australian market is a tiny fraction of the US market) but with all the new sector talk and other hype out there you avoid getting really hurt by something unforeseen by not making a big bet.

I get questioned a lot on the don't make a big bet mantra but think about how many themes there could be out there and how many you might have an opinion on. Just the other day I mentioned a half dozen just in the industrial sector. Five or six themes at 5% each on top of the more plain vanilla things you may hold and you probably have a full plate.