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I notice a lot of financial commentators are referring to the Chinese stock market as a 'bubble' and comparing it to the Nasdaq of 1999. Not too long ago Goldman Sachs and a few other Wall Street firms came out with a sell rating on China citing excessive valuation or something to that extent. I however believe the Chinese stock market will continue moving higher possibly doubling or more in the next 12 months. I remember when people were screaming bubble back in 2003-04 when the US real estate prices were rocketing. The RE market surged even higher in 2005 on the back of this. Infact by mid to late 2005, a lot of those people who were screaming 'real estate bubble' were busy concocting reasons to justify the RE growth citing solid fundamentals and other reasons which ultimately proved false.
I don't believe a bubble is a bubble until even the most die hard critics join in and agree the excessive price rise is justified . Happened back in late 1999 early 2000 with the Nasdaq when everyone tried to offer a rational explanation for the price increase.
I believe this will happen with the Chinese stock market as people currently screaming 'bubble' will probably join in the next 12 months and agree the price rise is based on solid fundamentals
When I start hearing of seminars titled ' How to make money in Chinese stocks' , when I start seeing books titled " Shanghai Composite 100,000" at the local Barnes and Nobles and when my neighbours and people I meet at cocktail parties start talking to me about how much money they are making in Chinese stocks, then that will be the time to sell China. Not before.
I don't believe a bubble is a bubble until even the most die hard critics join in and agree the excessive price rise is justified . Happened back in late 1999 early 2000 with the Nasdaq when everyone tried to offer a rational explanation for the price increase.
I believe this will happen with the Chinese stock market as people currently screaming 'bubble' will probably join in the next 12 months and agree the price rise is based on solid fundamentals
When I start hearing of seminars titled ' How to make money in Chinese stocks' , when I start seeing books titled " Shanghai Composite 100,000" at the local Barnes and Nobles and when my neighbours and people I meet at cocktail parties start talking to me about how much money they are making in Chinese stocks, then that will be the time to sell China. Not before.
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