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    • Hot China Stocks: A Bubble to Avoid [view article]
      Well, Chinese stocks may be up much, but there is no bubble so far. To reach a real bubble, PE needs to be over 100 or even 1,000 like Japanese stocks have done about 20 years ago, and everything must be rosy.

      I remembered that Japan stock market average P/E is 1,000 around early 1990s, and at the same time Japanese were still arguing there was no bubble as Japanese real estate was expensive enough to justify the high P/E ratio. I was in Japan during the time, all the Japanese I encountered told me so. That is the time for real bubble.
      Because a stock went up 120% in a year did not justify a bubble. With so many negative comments coming out, a real bubble is far away.

      During the real bubble time, US high tech stock has P/S over 100 and without any meaningful P/E. That is the real bubble time.
      Oct 17 06:04 PM
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