Get Ready for the Chinese Bubble to Burst

Jan. 31, 2007 8:08 AM ETFXI, PGJ, CAF8 Comments
John Bethel profile picture
John Bethel

I used to enjoy reading Paris-based Michael Sesit when he penned his weekly "Global Player" column at The Wall Street Journal Europe. Then Sesit joined Bloomberg and I've come across this column of his on the emerging markets, including China.

Are there risks? You bet. Strategists at Citigroup Inc., UBS AG and HSBC Holdings Plc are advising clients to be wary of China, whose Shanghai and Shenzhen 300 Index has soared 155 percent in the past 12 months, including 26 percent in 2007. At 38 times projected 12-month earnings, the index's price-earnings ratio is more than double the MSCI Emerging Markets Index's 15.

And, over at Maoxian, The Chairman offers up an illustration of What It Will Look Like When the Chinese Stock Bubble Bursts.


This article was written by

John Bethel profile picture
John Bethel ( is a freelance writer who has managed his own portfolio for the last 11 years. We’re normally wary of non-professionals, but John’s articles — published on his blog Controlled Greed ( — are a useful and thoughtful source of investment ideas. The focus is value. His stated time horizon is 3-5 years, and his analysis pays close attention to classic valuation metrics. Mr Bethel owns every stock he writes about, in contrast to the recent trend in sell-side firms to prohibit analysts from taking positions in stocks they write about. We think that having “skin in the game” is a good thing, as long as ownership of stocks under discussion is clearly disclosed. Blog URL: (

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