huangthomas

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

There are 4 stock markets in China. Extrapolate A-share market to B-, H-, ADR......make that much sense? Each valuation of the same stock share in 4 markets are different. B-share market valuation is only one-tenth of the A-share market. If A-shares carry a P/E ratio of 50, B-shares are only 5. Is PE of 5 too expensive in markets which the share earnings increase, on average, 40% from 2005 to 2006 and the Q1 earnings increase 100% (yoy). (A word of caution: don't buy B-shares because of liquidity problems). H-shares and ADR are priced modestly at 15-20. And again, are they too expensive? Despite crying of wolf, fire, bubbles........... Chinese Index ETF of China H-share (FXI) and ADR (PGJ) keep rising, why? I think American investors have their own mind, unaffected by chicklittle, such as GS....... Only A-share CEF (Morgan Stanley's CAF) suffer a --20% (from+20%) discount from +20% premium, with a total drops of -40%.