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China Bubble?
Posted: Tue Jun 09, 2015 1:02 pm
by MachineGhost
Looks like we got another bubble waiting to pop on our hands here. China has doubled in less than 12 months. Typically whenever a market doubles in less than a year, its ripe for a crash.
With their weak economy and flat real estate, it seems to me the locals are desperate and are plowing it all into stocks. It's not as if they have any other investment choices other than gold.
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Re: China Bubble?
Posted: Tue Jun 09, 2015 1:18 pm
by Reub
Was the United States in a bubble at the start of the industrial revolution?
Re: China Bubble?
Posted: Tue Jun 09, 2015 6:34 pm
by MachineGhost
Reub wrote:
Was the United States in a bubble at the start of the industrial revolution?
Good question!
Re: China Bubble?
Posted: Tue Jun 09, 2015 9:01 pm
by dragoncar
MachineGhost wrote:
Reub wrote:
Was the United States in a bubble at the start of the industrial revolution?
Good question!
I was curious, and this was the best I could do:
http://en.wikipedia.org/wiki/Railway_Mania
still interesting if you're ignorant about history, as am I
Re: China Bubble?
Posted: Tue Jun 09, 2015 9:04 pm
by dualstow
Saw this in the WSJ today:
"
China Near to Joining Influential Stock Index
China is closer to joining MSCI’s widely tracked Emerging Markets Index in the latest sign of progress for a nation that has been pushing to change the openness and transparency of its markets.
"
Re: China Bubble?
Posted: Wed Jun 10, 2015 9:57 am
by MachineGhost
MSCI demurred, but China can be added at anytime over the next 12-months.
I don't think foreigners realize exactly how bubbly the situation in China really is. Locals are literally borrowing to buy the A-shares. They're even going so far as to travel thousands of miles to Hong Kong just to open a brokerage account to get margin privileges and then when they get home they trade online and buy their local A-shares, despite the fact the exact same companies are trading at a substantial discount in Hong Kong as H-shares.
This can't last, but it'll be a fun ride until its over. I'd say 2015.75 is a good time for the top.
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This could be China's 1929.
Re: China Bubble?
Posted: Wed Jun 10, 2015 7:03 pm
by Reub
Someone probably said the exact same thing around the time that Al Gore invented the internet.
Re: China Bubble?
Posted: Mon Jun 15, 2015 10:37 am
by MachineGhost
According to data compiled by Bloomberg, stocks with primary listings in China are now valued at $10.05T, an increase of $6.7T in the past 12 months. Many consider the heavy expansion as worrisome. No other stock market has grown as much in dollar terms over a 12-month period, valuations are now their greatest in five years and margin debt has climbed to record highs, all while the economy is mired in its weakest expansion since 1990. Putting it into perspective: The size of Japan's stock market is $5T. The U.S. market is valued at almost $25T.
Re: China Bubble?
Posted: Mon Jun 15, 2015 6:49 pm
by Reub
US equity margin investing is extremely high now also.
Re: China Bubble?
Posted: Fri Sep 23, 2016 9:13 pm
by MachineGhost
Now's the time. MSCI finally put the A-shares in 20 new indexes which will be a potential 5% in their Emerging Markets index. I picked up TDF today which is trading at a -13% to NAV. Looking at KWEB next week.
Also, VEIEX went green this week so all asset classes are effectively now "risk on". Something's gotta give!
