newguy05 and Asiaprop, in your view, why have Chinese stocks been the worst place to put your money in this year? Only four of the stock markets we follow were in positive territory on the year as of June 25. Three of them (Indonesia, India and South Korea) are in Asia. One (Germany) is in Europe. The only market with a significant advance over the year to date is the Indonesian market which is up 16.3 percent on the year. The next best performance is a 2.8 percent increase by the South Korean market. The worst performing stock market in 2010 is the Chinese market, down 22.1 percent from its level at the end of 2009. China is globally touted as the economic âengineâ which is pulling the world towards ârecoveryâ.
very simple. To a large extent because the Chinese government itself is attempting to slow things down. They want to reach their GDP targets but not much above. They are obviously fully aware of the problems that would follow a burst of speculative bubbles. A secondary reason is the unexpectedly (imho that was fully expected) bad numbers coming out of the US in the past could weeks/2 months, reflected in the weak USD. Europe also has weakened but I still think most of the sell off has been caused in-house.
Shanghai/china stocks dont have the concept of fundamentals, yes all the companies release their numbers and there are hot growth sectors etc..but in the end it's all just bullshit (the stock market). Also to give you some idea, there NEVER is a listed company going bankrupt to my knowledge, everytime a listed company is in trouble, there are HUNDREDS of companies waiting in line with cash in hand to buy them. Why? Because it's so much cheaper/easier to buy a public company and become listed than going through the process themselves. People basically only trade on news, tips and technicals to some extent, noone look at balance sheets or any of that. The crash last 2 years made many investors (grandmas and average joes) lose faith in the stock market, curbing upside. Keep in mind this is a very young and inexperienced market, most investors never experienced a bear market before the global meltdown there. Everyone and their gramdma(literally) was investing in stocks during the bull run thinking it's a sure thing, then BAM all of them got hit hard, and that was it, they wont be putting more money for a while until this memory start to fade. Unlike western investors who are experienced and understand market cycles etc...a lot of chinese stock investors are clueless about world finance/stocks, all they know is this "sure thing" isnt working anymore. Human nature never change, no matter the market or country. So shanghai stock is considered dead money to me right now, i have some small investments in their etf50 index fund (=sp500 here). The way i see it, i will be fine missing the first leg up when the bull happens, no point keeping money in it now. There are some who believe once the real estate market cools, the stock market will become hot again, and it certainly isnt a bad theory... as those are the only two options for most people to invest in china...and chinese right now has a lot of cash on the sidelines, so you can see the dilemma a lot of rich chinese have - no place to put money right now.
Only four of the stock markets we follow were in positive territory on the year as of June 25. Three of them (Indonesia, India and South Korea) are in Asia. One (Germany) is in Europe. The only market with a significant advance over the year to date is the Indonesian market which is up 16.3 percent on the year. The next best performance is a 2.8 percent increase by the South Korean market. The worst performing stock market in 2010 is the Chinese market, down 22.1 percent from its level at the end of 2009. China is globally touted as the economic âengineâ which is pulling the world towards ârecoveryâ. I wonder If you have any stocks in Vietnam country? I think this country have more potential in investigation and business.
An interesting piece on China's property bubble on Mish's blogg today: http://globaleconomicanalysis.blogspot.com/2010/07/ponzi-shark-loans-fuel-chinas-housing.html
"here we have bank running, we can not withdraw money anymore in every local bank. Many people committed suicide as a result." lol....you are a retard if you think this bullshit is interesting or even close to real.
So that's your response, a quote from one person, and name calling. I was hoping to get some insight from our apparent China experts here, you being one, on what was posted by Mish, but see you are just a cretin with a big ego, which makes Mish's post that much more credible.