BCA: China has 20-30% more downside to go

Discussion in 'Wall St. News' started by a529612, Feb 27, 2007.

  1. S2007S


    watch all emerging markets, last June they fell 30% before rebounding. Take a look at EEM and FXI, thats what happens when a market is just sooooo overbought
  2. Some finance ministry guy in China warned about the Chinese market like 2 weeks ago. Come on guys. The Shanghai Index was up over 100% last year. Does this caught anyone by surprise? COME ON! Its just the matter of time.
  3. I'm thinking FXI is a great buy here. bought a few calls today at 93 and 96 levels. If we get down to 85, I'm going in heavy. Remember FXI was at 117 at peak.

    PEs are solid, and this isn't Shanghai. H shares are much more reasonable, and have excellent growth prospects.

    I'm not sold on this 'economic slowdown' purported by the pop media. Just this morning, gasoline at 1.86 is leading crude up to 62.00. Didn't hold of course, as things got more shaky. But gasoline would have never rallied PERIOD today if this was the end.

    This to me is technical hedge fund carry trade unwinding. The rebound back will be just as violent.
  4. asap


    by the time the selloff is officially declared over by analysts, press and experts, the prices will be once again overbought.

    it makes more sense to buy when everybody says it going down and sell when everybody says we are back on track.
  5. I'm not buying those media hype neither. I was in May 06, and missed the rally. Media is full of crap. Its only good for entertainment.

    If the ADRs are base on H shares, I think you are in good shape. H shares is traded at HEAVY discount compare to A shares.


  6. True some H-shares on HKEx traded at discounts as high as 75%. Unfortunately arbitrage is impossible even if structured with derivative instruments :mad: Even the twaddle heads at The Economist magazine did 3 page article on it a few moons ago. In any case A-shares are for domestic investors(taxi drivers, young bored and frustrated housewives) only and a few approved institutional investors. Have largely played Shanghai & Shenzhen through FTSE/Xinhua China 25. Yielded 345pts yesterday :D
  7. dac8555


    no offese, what you are saying is what everyone was saying in 2000-2001 for the first parts of the correction.

    on day does not a correciton make, it is probably the beginning of a downtrend. remember the business cycle, china has been growing at a staggering rate for a long time, and the gov. is trying to put the breaks on.

    buying here is pure gamblig..and NEVER average down.
  8. Just saying, because H shares shouldn't crash like the Shanghai index.

    No, there's no arb available because foreigners only can buy B shares or H shares.

    90% of the "investors" in China are retail investors. Most of them are old folks. 50 and above. I think a lot of them are getting burn. But don't worry. More fools will come back with more money. LOL

    Sell your house and buy stock! LOL. If you wonder why the Chinese market has been so speculative/hot. Come to New York City and check out our local OTBs.
  9. True, apparently a few people had been approaching loan sharks and getting additional loans against their homes on top of what the banks had given the to trade/gamble stocks :eek: . Been flipping B-share IPO's for a while now and the returns we pure bubble style, had planned withdrawl for mid March but looks like l have had a catalyst. Last one l did was HKEx: 1886, how can a juice company squeezing oranges be given PE's of 50 or 60 We ain't seen nothing yet. Sometimes you are thankful. l had margined Samling IPO, but a small bird/voices in my head told me to rush for the door.

    EXHIBIT 1: http://baby.boom.com.hk/portfolio/IPO/list.asp

    Yes l flipped Nine Dragons Paper when l should have turned it into an investment:(
    #10     Feb 28, 2007