Yeah, that’s lookin a bit toppy . . .
Investech’s Jim Stack had a terrific call last month, reiterated on June 1st: Sell China.
“We DO want to issue a formal warning about the Chinese stock market and Shanghai Index. This market has entered a speculative frenzy, with more new Chinese trading accounts opened on Tuesday of this week than in an entire month last year! The government is clamping down on the speculation, and has raised interest rates for the 2nd time in barely two months. We suspect the pinhole will go into the Shanghai market’s parabolic rise in the very near future. If you own Chinese stocks through ADR’s or China-dominated mutual funds, we urge you to take profits now.”
-InvesTech Hotline Report – May 18, 2007
I agree with what Jim calls "Bubble Dynamics:" Once created, bubbles do not deflate gradually – they pop with quite the mess for those investors who have been participating. Fortunately, China’s stock markets are not nearly as integrated into their society as ours, so a correction in their markets are much less likely to impact consumer spending and sentiment.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.