Yup, these are the moments when the big money is made, I sit around with piles of cash waiting years for this sort of thing. Nice bounce in SH this morning, flipped 25% of the shares so I have that quick gain, holding the rest, will buy the sold shares back if it goes lower this week, which it could. Also if Greece gets cheap enough, I mean really cheap, I’ll pick some of that up. S&P500, I missed the boat, was thinking of shorting that last week but didn’t pull the trigger. But if AAPL hits $125 I’ll buy more, earnings coming in a month. Non-volatile markets were getting really dull, finally we get fun.
really funny. i actually said the same thing to my boss. “we’re in for an interesting summer”. between greece’s contagion fears, low oil prices due to opecs flooding the market, incoming rate hikes, ppl selling on the chinese bubble. it should be nice to see how people react. markets going up or staying the same isnt all that great cuz everyone is fat and happy. when a downside hits though, we see who the real investors are, but more importantly, the fat gets trimmed. the weak gets culled. and the system is stronger for it.
how’s that 75% treating you? let me guess, you sold for a profit without stating it on this forum.
pure alpha = the only guy in the world who makes money on the long side during a market crash.
"There is some 2.2 Trillion yuan ($354 billion) of margin financing in the market currently, which Goldman Sachs estimates is equivalent to 12% of free float market cap of marginable stocks, or 3.5% of GDP. The investment bank’s strategists, in a note on Monday, called both these ratios “easily the highest in the history of global equity markets”.’ -WSJ
Ouch. There are a lot of small investors feeling the pain right now, they could use some decent investment advice. I feel bad for them, greed is probably going to wipe out a lot of peoples life savings.
Matt, perhaps you should look up charts for the three names which I said that I purchased, then you will know! I am flat, ICBC offsetting Fuyao, and Siac neutral. Not that analyzing results one day later is relevant.
It’s about stock picking. How many times have I said not to buy the Chinese indicies? Lots.
Realistically though, I think most of these people are just losing some of the MASSIVE profit they made since 2014. Investing in this market was THE BEST place in the entire world to invest in 2014, and it’s not doing bad this year either. So it’s probably people on this forum who could use investing advice, the unsophisticated Chinese investors who don’t even know what P/E means already nailed it. 
There are going to be some dummies who got in late of course, buy high sell low, they are always the ones who get screwed.
Ok, so lets start with a clean slate. Are you now saying that it (the Chinese index) may infact be over valued (ie will the index be higher or lower in 3 months)? Because before my impression was that you were clearly saying there is no bubble.
i think he’s talking about investing in the value stocks of a bubbly growth market. based on his purchases, this seems to be the case. not something i’d do because you assume all of the downside of China’s massive debt bubble without the price momentum that the growth stocks bring. soros for example, and all of the other bubble chasers, don’t buy ICBC when they buy into a bubbly market, they buy insancely bubbly stocks so he can make a quick buck and then leave when the ish hits the fan. i’d much rather be buying Citigroup at 0.8x book in a market that has already gone through its financial crisis than ICBC at 3x?, 4x? book (who knows if assets are priced properly) in an economy that is undergoing rapid change and has insanely inflated assets, both real and financial.
CFAs tend to forget that in a financial bubble, value stocks are most expensive when PEs are low (due to inflated earnings) and cheap when PEs are high (following an earnings crash).
Ok, well I still agree with you that I think this bubble is big and real (as we’ve seen) and that value investors will still get hit when it finally does hit then fan. But if he’s talking about picking stock right now, I’m sure it’s possible just doesn’t seem worth it when you can probably wait a few months and have easy pickings.
People have been waiting for chinese stocks to pop for a while. I don’t disagree that China seems very bubble prone (though haven’t followed it closely of late), but the usual rule with bubbles is they go on for far longer than you can possibly imagine, and then drop far faster than you ever thought they would (not my quote, but I liked it, I think that was Keynes).
Everyone thinks they can get out before the end, but it wouldn’t be a popping bubble if it were actually the case. Winners in the bubble game always sell too early, but hopefully not too too early.
The other observation about bubble markets is that pretty much every investor ends up looking like an idiot. The only question is whether you look like an idiot before the pop or after it.
pure, my man, keep doing what you.
Well, doubled my money back in the 2006-2007 bubble. Not really felling like an idiot on that, or this. 
Tuesday up 6.3% on my 3-stock portfolio, and a 5% dividend coming in 4 days. With the S&P having erased YTD gains, this is when I really start pulling ahead. Not to say I “called it” yet again, but both Bchad and I called this one as I remember; that 2015 US gains would be mild, and that they would be reversed multiple times during the year. Especially going into rate hike, zero reason to be in the US indices, just stock pick (AAPL), and invest in better markets. My CN moves are all calculated, but theories I’ve seen about how aren’t my reasons (LOL, I’m not a textbook kid following the CFA manual you noobs!). There is no manual in this game. A person needs to have an understanding of the actual market (which is constantly changing) and calculate based on that, not some generic fixed strategy that can be explained on TV in 15 seconds. The government is behind us on these trades, especially on mega-caps, and they wield significant power. Two of the names I bought were already the target of massive Chinese investor overreaction prior to this sudden correction (the -10% one-day dip sent it over the top). And there was reason to believe there would be serious gov influence (just as there is with the FOMC) to prevent further decline (especially if it entered panic-mode). And of course we are protected with “too big too fail” on ICBC and Siac. You still get a big upside with the mega caps (see reality above), but less risk. Also since the avg correlation is .1 with other markets we don’t have to worry a lot about things like Greece…the locals simply don’t care what happens outside their “bubble”, so it makes estimating probabilities easier with less variables. And the currency is stable so we don’t have to worry about that either. Volatility says we will probably see green for at least a moment, so we can take it and run. Really it’s the just best thing going, so I’m there. When there is something better I’ll be gone. No favoritism. Back on topic, I think Americans significantly overestimate the probability of the Shanghai “sky falling”. Their ideas seem to come from watching “the news” instead of having real data, and nationalistic biases which warp their view of what little data they have. And of course “chart looking”; oh it went up a lot (because it was massively undervalued), so now it must be overvalued! It has come down to around 17X now vs US 19X, Brazil 20X, Philippines 22X, India 30X. Of these CN is clearly the future. Not recommending buying though, yes there is still some money to be made off the clueless, but not if you are one of the clueless. If not clueless, still minimize time in market, see green, take it.
That must mean that the market is efficient over there.
Even if the valuation is correct the chart is technically broken. There will be a better long-term entry in the future, you can be fundamentally right but technically wrong at the same time.
I’ll be the first one to make the call that the index will likely trade toward it’s 50dma average with an extreme ‘reach’ for the 200dma on the weekly chart. That’ll be a solid entry to capture these ‘fundamentals’ you’re suggesting.
I’ve been thinknig the market has to take a break from shooting skyward for so long that I was bound to be right one year. 2015 seems to be that year.
That said, my trading system just closed two of its long term assets and is pretty close to being 100% cash. I should probably pay attention to that.
…the opposite holds too.
Does it still make sense to buy the touch of the 50dma if that happens 10% higher or are you stating the current price of the 50dma right now?
i’ll be honest. im a bit bias. i dont like working with people with poor reputation. and you guess it, china’s rep is bad. with that said, because i dont trust china, i dont think other market participants will believe china overnight until they fix their biases. the only way china goes up is dependent on its domestic investors and my thoughts are they are tapped out. because of this, imo, china should prolly trade at a significant discount. i’d say around 10x.
my thoughts are the same way with small caps. these tiny pos trade at ~22x. dafuq? people are a bit cray right now. so best be defensive. im not saying go to cash, stocks or bonds cuz rates are crap. im saying go to stocks cuz TINA.
i’m looking at the weekly chart
http://stockcharts.com/h-sc/ui?s=%24SSEC&p=W&b=5&g=0&id=p40050353550
anyone play Elliot Waves?