I’m not jealous. I wasn’t even aware you had said so back in November. Do you honestly think I bothered to go through your previous posts just to say the opposite?
. I just think at this moment in time, investing in the Chinese stock market is a poor quality trade. Good for you making money off it, but I never said now was the time to short China, that will come in time. As I said, Greece will drive the markets (as it is already starting to do) for now.
Had you asked me what I would short I would have told you so, but that was not the question and you have taken my response out of context here.
China will implode with the way it is heading though. For the reasons I stated. It could well be 2 years yet, but it is coming. I’ll continue to avoid it for that reason. There are plenty other areas in the markets to make money from in the meantime.
Yeah, people have been saying that since…a long time. But the timing has to be right to make money. If you short Shanghai now and it goes to 35X+ (like it did last time), that’s painful.
The median forward P/E on chinese exchanges is 58.
“The problem with the Shanghai Composite is that 94 percent of Chinese stocks trade at higher valuations than the index, a consequence of its heavy weighting toward low-priced banks. Use average or median multiples instead and a different picture emerges: Chinese shares are almost twice as expensive as they were when the Shanghai Composite peaked in October 2007 and more than three times pricier than any of the world’s top 10 markets.”
…also great article in WSJ today talking about manufacturing comanies in China that are shutting down so that they can day trade in the markets. “Manufacturing is a very hard business these days. I want to make some money in the stock market and use the profits to restart my manufacturing business later, when the economy turns for the better”.
also, china is not a truly open market so above average valuation is not warranted. anything above 15x is expensive. see russian valuations pre-rampant inflation for an example of where chinese stocks should trade.
I was actually going to post one of these Bloomberg articles as an example of what not to read. They’ve been writing these propaganda articles for years now “stay away from China invest in the S&P500!”, backtesting…China has been the world beating market throughout this time. Nationalism (and reading your local media’s “information”) is a problem for many investors (including people commenting on this thread). http://bloom.bg/1LezusL
The index P/Es are in fact around 18X, as I said. Everyone who knows the market (not you guys) knows the mega-caps are cheap and the micros are wacky overvalued (this is how the Chinese investors behave, see my earlier comments on studying investor behavior). Which is why you don’t buy the index, you need to stock pick. China is opening up their financial market at a crazy speed, foreign inflows in future years is one of the big reasons to be in it. Goldman had a report projecting SH passes NY in our lifetime as the largest market on the planet. But yeah, go ahead and sleep thru it.
Anyone who thinks China is Russia needs to go back to school.
I look forward to you providing us links to more credible information. I dont believe anyone has said there are no good investments in china, just that outside of the major banks most valuations are stretched, to say the least.
opened to new investors, liquidity drives valuations
PBoC is easing, unlike during previous bubbles. It’s a “don’t fight the Fed” scenario in China.
China is probably the world biggest beneficiary of cheap oil
Chinese capital is captive. Fund flows are mostly going to go in one direction.
International and China this year was one of the most telegraphed moves out there. Government begins easing, market goes up. Not hard to see.
Don’t fight the trend. Saudi is next.
In the US, the catalyst for a stock market decline is rising interest rates, as it has been for years. Things are going to get interesting if borrowing costs are higher (as they may very well be) when that wall of debt matures in a few years and companies have to roll to a higher rate.
so i’m going to believe the viewpoint of one korean and one brit over every middle and upper class Chinese person who ever lived. the reason Canadian real estate is the most expensive in the world is because the Chinese have NO TRUST for their own government and EXPECT expropriation of domestic and possibly foreign Chinese assets to occur one day. this is why they buy real estate in a welcoming country known for protecting the rights and property of both its citizens and residents. this is also why they bend over backwards and spend hundreds of thousands of dollars “citizenship vacations in the U.S.” for their unborn kids and on North American post secondary schooling for their living kids. please develop an advisory relationship with several chinese-canadians or chinese-americans before commenting in this discussion with any confidence because you’ll realize they wish to hold 90%+ of their assets outside of China for these reasons.
yes, China is not Russia… today. but every chinese person believes China’s political situation will shift dramatically and in an ugly way in the near future. you do realize, that on a near weekly basis, the Chinese government makes high profile millionaires and billionaires “disappear” and confiscates their assets right? you do realize that property laws in China are not fixed and that land can be expropriated for “state purposes” at any time at below market value right? does this sound like a country that respects property ownership? sounds much more like Russia than North America or Europe.
for these reasons, China’s long-term average market multiple should be well below average. don’t even get me started on inflation’s effect on market multiples b/c that would mean China’s market multiple should be far far lower.
weird biases? try biases that are widespread characteristics among landed immigrant chinese. try look at land policy in china. if land rights are not protected, no property rights can be expected to be protected.
China relates more to Russia than other countries, strictly based on economic/government policies. Similar idealologies but different underlying culutures for sure.
huh? i’m happy upper class, above average IQ chinese are coming here. i can’t see how that could be a negative. you may be the first person to ever accuse a canadian of being racist/unwelcoming. sorry.
