LOL, have you noticed all these chinese small caps popping in the last few months for like 3-400% in a couple days only to get decimated when reality sets in? Look at $CHOP, couldnt think of a more stereotypical/fitting name, LOL. Just one small cap turd after another making these kinds of moves, free money shorting this trash if you do your homework.
All of these things are pump and dumps, there are so many companies that look identical to this in the last few months, it makes me think i should learn to trade the chinese market cause their investors clearly are not sophisticated.
Just like how they are forcing them to invest their money in chinese stocks or real estate, while they create entire cities that are bullshit. And we wonder why so many smart chinese people have converted to buying real estate over here. The whole chinese real estate market is a giant facade.
Where I hang out in China small villas (300sqm gross, 200 sqm gardens) sell for 5million USD. I'm curious wether the price will go down after a market crash, but it was about that high with the market flat for years (and fwiw there are some very large mansions in the same area, serious money out there).
And again the rehashed news about chinese ghosts towns miss the bustling and succesful chinese megacities. There are like 100 million people living between Guangzhou and Hong Kong only, at least Beijing, Shanghai, Guangzhou and Shenzhen have introduced drastic limitations on car sales because it's so congested there (and wealthy for a large part) It's from far the most populated country in the world, which has develloped tremendously fast, in the grand scheme of China development, I'm not convinced a few large projects which went wrong are that important.
Do you really think the chinese buy real estate overseas because the chinese real estate market is dodgy or they look to park some of their money outside the reach of Chinese government, diversify their assets, and add to their chances to get residence permits and visit visa overseas ? An interesting piece of data missing is how much real estate those chinese buying overseas already own in the Mainland.
I also think there is some misconceptions about China that people are missing. China's gov't is actually very smart. Let me offer a theory inside their mind. China is going through massive growth. This growth really can't be stopped because it's not based on stock prices but population growth, credit expansion and a growing middle class. That's the perfect stew. They understand this. What they did after the global credit crisis in 2008 is instead of running and hiding under the bed like most of the western world, they opportunistically took advantage of low commodity prices. They bought copper aluminum, steel, tin, lead, gold, oil, everything. They buy when prices are cheap and store it. Because when we finally see global growth back to 2.5% again, commodity and raw material prices will be substantially higher and the US and the rest of the world will be paying up while China owns everything. Second key point. During the credit crisis, yes, China built these ghost towns. Do you know why? Again, they opportunistically took advantage of cheap labor costs. They built these massive cities when raw materials were being given away and when china laborers were willing to work for nothing. If they wait for everything to be rosy labor costs will skyrocket and raw materials will be in short supply. They built these cities in anticipation of their future growth. I only wish the US had this kind of vision. Instead here we buy the highs and sell the lows and use debt to make up the difference. Bloody brilliant. By optimizing their labor input during the recession they might just be able to use expansionary monetary policy in the future if needed without having to worry about skyrocketing labor costs adding to inflation. China knows those ghost towns will be filled. In fact, more then filled. Our gov't should really be learning from them. And 50 years from now, kids studying economics will be reading about the "China Model" and how well they made it work. As a trader, you have to admire what they are doing. As a US citizen, I'm not going to be happy that they will own all the raw materials in the world in the future when the rest of the world will desperately need them. Guess who is going to pay for that? We will. The sign on the proverbial China door will simply read "We Appreciate Your Business. Come Back Soon"
Never really thought of it that way before, you opened my eyes to a whole new way of looking at it, thx!