Last I checked Goldman was out of the prop business. Their analysis reflects that these days.
lau is the long guy left going long and he wasn’t the only guy to call the run up in 2014. I think they’re missing a lot of hidden margin trading through corporations on unsecured debt. I’m not sure how effective monetary easing is when you’re economy has a capacity utilization gap.
^ Dude you are the master of uninformed commentary from the sidelines! 
Well another weird day for CN/HK. Massive tug of war going on in the largecap names I mentioned earlier in the thread. Some opened limit down, only to go back up slightly positive, then back down. China now encouranging these large caps to buy their own stock when they see declines. In the end they are actually trending up / flattish , so that part of the government’s plan seems to be working. Everything else, limit down.
Interestingly the CSI-300 ETF in HK ended -19% down despite the actual index “only” going down 7%. That’s a rather balls move, perhaps mainland shorting to hedge? So I took the other side of that bet. Picked up a little Hang Seng even though I don’t care about the components, getting rather cheap. Mostly just sitting on cash and waiting though…
Ohhh no, definitely no - they’re very much in the prop business.
post Dodd frank gs was basically neutered:
http://fortune.com/2014/10/06/goldman-sachs/
also, as of today I’m about 5% more right than Lau. Pretty good for an uninformed sidelines commentator!
^ Naw, that’s cheating. You assume someone who had 115% gains would continue to hold until it finally crashed (dumb), but in your own portfolio you take gains.
Also being informed about your investments does not make you not uninformed about your not investments. 
Lau said yesterday it was a bull market and a buying opportunity, I said it had further to fall. If we each ate what we cooked, I’d be about 5% up on Lau today. Lau is a strategist and not a trader or PM, he’s bullshitting with no book as much as the next guy.
in a market crash, nobody is “informed”, especially not those who are active in that market, that’s why it’s a market crash. this is why your “informed” arguement has absolutely no weight purealpha. it is likely the outsiders who haven’t participated in the market are the least biased. it’s not like it is outsiders who are panic selling, it is “informed insiders”.
all of the government efforts you listed are mere desperation to halt a market crash. the efforts may help the speed of the decline by giving investors something to feel good about but they would stop the decline. i suggest you do a little research on monetary stimulus. it can help prevent absolute destruction of a financial system/market by stabilizing it temporarily near the bottom but it doesn’t really work near the top of a financial bubble. remember, this is a financial bubble, not just a market bubble. the government is going to have to transfer A LOT more from its very strong balance to the very weak private balance sheet if it wants to stem the tide.
Shanghai Compsite above 5000 at this time…great call
whats the support, 3000-3500?
Anyone have access to a bloomberg terminal or other platform that can tell us the median P/E on the Shanghai and Hong Kong stock exchanges? My understanding was that median forward P/E in Shanghai was 58 about a month ago, so they should be roughly 40 today, assuming no changes in forward earnings expectations.
I’ve never been to the websites below so I can’t vouch for the accuracy, but both are listing current P/E’s in the 50s. I’m assuming thats ttm rather than forward. I’d be interested to know what the actual median numbers are, I just don’t have the research tool/know any good websites for this.
http://www.dailyreckoning.com.au/why-is-goldman-sachs-still-bullish-on-chinese-stocks-cw/2015/07/08/
http://www.smarteranalyst.com/2015/07/02/chinas-bubble-makes-the-dot-com-boom-look-mild/
Taking a step back from the fundamentals, both Shanghai and Hong Kong are closer to their 52 week lows than their 52 week highs, so I’m wondering how much further this drop has to go before we see new buyers entering the market. I think if I was shorting the index I’d probably take my profits.
LOL, you guys talk so much…
Nov I bought. May I sold (massive gains). July I re-entered in two rounds of quick trades (massive gains on both). All time-stamped here on Analyst Forum. These results come from understanding the market. 
i’ve never heard GS praised so much since my undergrad years and this was during the whole abacus thing when they issued their cdos and then shorted right after. i guess this is smart in the short run, but in the long run, whod ever want to buy from them.
Well, we can reason thru this using an understanding of the markets…
In SH the buyers are the retail investors, and they do not look at valuations, thus the question is not the right question to be asking. They will buy when they feel like buying, assuming they have any money/leverage left. The institutions and insiders have already been ordered to buy, and that isn’t enough. The retail maniacs rule the market, so there is no floor, other than 10% per day (which is why that daily floor is there).
In HK the buyers are more varied, and they do look at valuations. Valuations seemed low today, so I bought a little Hang Seng.
huskies. shanghai is about 20x. shenzhen is about 50x. the difference is one has govt control on the shares the other doesnt. ppl put a premium on shares owned by the govt. what ppl dont talk about is that hong kong trades at 10x. if we are comparing both indexes, which do you think should be higher? but alpha has a point, historically, china has traded at ridic multiples, around 2007 peak about 70x for the shanghai. imo, ppl who are gamblers will go to this market. Also imp to note that ~40% of the index is in financials, and yea this sector should really be trading at about 10x.
Thanks Nery, is that median or average? Forward or trailing? If the 58x forward for Shanghai in early June was accurate, I’d expect it to be somewhere around 40 today.
The gamblers will gradually exit these markets as they become more open and efficient, though that may not be anytime soon.
Update: booked an easy 7% return this morning on this mispricing. Damn, I’m totally on fire. 
nyse suspended, well done alpha
^
LOL - i kid you not, I was just typing the same thing
Booked a 5% gain on Hong Kong this morning (no point in sticking around for possible Friday selloff), if I’ve counted right that’s 8 out of 8 winning long trades, in a declining market, over the last two weeks.
Not bragging though… 