Unraveling China's Equities Sell-Off Puzzle [INFOGRAPHIC]

As investors grapple with fallout from the Chinese selloff, they attempt to position for what may come next.

ahm Adrangi, Kerrisdale Capital Management LLC: Amid the sharp slide in stock prices in mainland China, some investors are looking to buy. Mr. Adrangi, whose hedge-fund firm manages roughly $350 million, and his team have been looking for buying opportunities in China and Hong Kong.

“We’re looking hard at Chinese stocks that have gotten really beaten up because those valuations will reset to more-appropriate levels,” he said. The New York firm on Tuesday bought shares of Huabao International Holdings Ltd. which was trading at 8 Hong Kong dollars ($1.03) in late May but finished down 10% Wednesday at HK$2.96. “And we’re looking for other examples, small-caps and midcaps that may have been overly punished,” he said.

—Juliet Chung

Pedro de Noronha, Noster Capital LLP: The managing partner at the London-based hedge fund said the situation in China brings to mind the dot-com bust: “Very quickly first-time investors were seduced by the returns their peers were getting and got sucked into this bubble…[It] reminds me a little bit of the dot-com bubble where the cabdrivers were trading stocks and giving you tips while you rode in their cabs.…I don’t think China is where any prudent investor’s money should be. They are decades away from offering acceptable corporate governance standards. I don’t believe a single number in their balance sheets or cash flow statements.”

—Laurence Fletcher

—Christina Rexrode contributed to this article.