rlirph

Massive Underlying Risk for Chinese Market Buyers

I am another "dumb ignorant Chinese retail investor".

Many people seems to forget that China market runs ahead of the US market in timing. It peaked in October, 2007 and crashed in November 2008 and lost 73% of its value. Just because the market went up 100% this year means you still lost 36% of your investment in the past two years.

Large caps stocks in China are mostly SOE(state owned enterprises). Their profits are determined by action of the government, not by the market. Just look at the pricing history of China Mobile and you will have a better understanding of the Chinese market. Most US investors stay away from SOE because they are not market driven. I suggest that your money should only be put in SOE because when the company is majority owned by the State the government will not enact actions which may jeopardize their own pocket book.

Asset bubbles are created by governments (US & China). Follow the money flow and you will know when to get in and to get out of the market.