John Gaats

Shanghai Rallies, Recoups Most of Thursday's Drop

Is the roller coaster over? The heavy handedness of the governement is indeed troubling.

More Volatility in Sight for China's Markets

So far, the volatility you dread so much is a V-Shaped drop and recovery. There is nothing new if that is what you predict. Using Nasdaq to point to the future of Chinese stock market is really a guess work. You can point to any market say it is a Nasdaq. I will challenge you to predict when and how much. Before anything visiable, I am long on China. You can short it if you believe in what you said. Or you can stay out of it altogether. Any way, talk is cheap. Market is about risk taking and getting rewarded for taking the risk.

CIBC Warns On Chinese Bubble

I have not read the report. But there are considerable misinformation contained in your quote. I wonder how a reputable firm allows that kind of gossip dressed up as corporate report. The best conclusion I can have is that CIBC trusted someone without real understanding of China to cover that market. I also doubt if there is any relevence to FXI and PGJ.

Was China Behind Thursday's Market Sell-Off?

FXI is not Shanghai index.

Was China Behind Thursday's Market Sell-Off?

It is amazing peopel are using such a long text and numerous charts to distort facts. We know pretty well what behind Thursday's sell off. China stocks are holding pretty well during the sell off.

Anatomy of a Chinese Bubble: A Checklist For Spotting Bubble Tops

You forget to mention an important fact: there are much less securities than Chinese demand. China probablly has 1500 securities to satisfy 40 million investors. Over valuation can happen when demand exceeds supply by a large factor. However, I will not bet against China for all the reasons you listed. If you believe your own reasoning, try short sell Chinese ADRs or Chinese funds.

'Pao Mo': That's Chinese for Bubble

My guess is that Chinese market will not crash the way we expected. What we are doing is recycling our decades long doubt on Chinese economy in the context of stock exchange.

China's Stock Mania: The End is Near

It is hard to say any stock market that is free of stock mania. From time to time. From big mania to small mania. There is also selective chasing within the mania. In general, they over value their stocks because they don't have access to our stocks. In our markets, Asian ADRs are generally under valued. For example, DCX is more popular than TM. I call this a buyout mania.

Having said that, I sensed fear in the market these days. Good stocks are under valued. We have witnessed big drop from MHS to WGS to POT. The drop happen when they report good earnings. I call this fear mania.

The long and short is that we have our mania and they have theirs. I don't know whats going to happen when investors seek mania free. When we exagerate Chinese mania. Don't forget our mania. Stock markets are never good reflectors of real economy. Stock related blogs are even less. I hope we don't try to hurt others and end up hurting our own investments.

China is Only the Symptom

The main problem in China is a dirty and visiable hand of the Chinese government. The main problem here in the Big Apple is that we buy and sell on rumors. The Chinese ADRs are punished more in here than in H.K.. Some people seems to believe that China is over. Short sellers sports a good Chinese new Year today. Some people are vindicated for their long term warning.

I hope we will still be able to tell good from bad. There are good equities even in bad time. There are bad equity in good time. At the end of day, we want to make money.

Chinese Markets Take Biggest Drop in 10 Years

Looks that the reason behind the Shanghai drop was that investors were concerned about a heavy handed government. However, the way we read it here is that China's economy is heading for a slow down. If it is so, we are speculating based rumors. B.T.W., do you think Greenspan smells something or he is also speculating now that he is not the Fed Chairman.

Making Sense of Chinese Markets

Good point!

One more piece of info to volunteer here is that A shares are product of state monopoly go public strategy. Known as A+H. Instead of having big state monopoly listed here in the Big Apple. They choose to list them in Hongkong first. Then migrate back to Shanghai. The rationale here is certify the quality by listing in Hongkong. Then raise the value back in Shanghai becuase they have a lot of control there. Many of the FXI components will be listed in Shanghai under the A+H strategy.

International ETFs: The Best and Worst Players This Month

Good observation.

It is hard to understand that FXI decreases by -7.4% when EWH is up. Afterall, the underlyings for both are from HongKong. I wonder how much is difference between our pricing and the NAV.

Get Ready for the Chinese Bubble to Burst

Can you be specific on when the bublle is going to burst. Or how it is going to happen? I know that Chinese investors are insane. But all stock investors are insane. Can they become sane one day and bubble burst? My own experience is that the bursting itself is quite insane. Can you justify nasdaq falls from 4000 to 2000 all of sudden. Can sane people do it in a sane manner?
Other than passing rumors, can you present your own evidences. I think it is cheap to distribute rumors like this in New York when most people do not understand China

China: Probably a Bubble, Definitely Short-Term Overbought

When I was studiying Statistics at Boston University, many professors warned against using statistics to prve things in their first classes. It looks like you are using some numbers to prove "China: Probably a Bubble, Definitely Short-Term Overbought". I respect your freedom to express. However, I strongly disapprove the way you are doing it. It is a typical example of using limited samples to selectively compute.

Using standard deviation the way you are can deny a lot of growing stocks (or more generally, any grwoing time series) their future potential. You do not even bother doing a hypothesis testing. Then again, there will be a lot academic issues when you preceed with a testing work. That is why people spend years doing graduate work.

I am biased because I have put my own money in FXI. The way some people surpressing FXI is very much similar to the Chinese government: scare tactics. My concern is that when we selectively surpress FXI, we may also surpress other stocks. If we cannot maintain an ideaology neutural stock valuation, we may ruin our largest equity trading market in a long run.

China: Too Much, Too Fast

I respect your opionion as I respect mine.

For my own investment, I disagree with you on developed country approach. The big picture is that developed world will have 2-3% growth this year. In a funnyway, their stocks reflect that. AZ is a good example. Invest everywhere (including China). Grow very slowly. The problem is, it also falls big if the dow falls big time.

My hope is that we can identify some alphas so that we can make a profit even though the Dow is going to be tough this year. Theoretically, FXI should have very low correlation with DOW. However, I feel FXI is very depressed. Probally artificially. I don't mind peopel's free opinion. I just hope we don't penalize our investment because of wrong labeling.

Again, I respect your opinion. Happy investing!