(Opinion) I am not a rich man some would say I'm not a very smart man and I do not have any stock market qualifications However I have been around long enough to know history always repeats itself and I do know one thing.
The only way the Chinese stock market can go is up. I'm suggesting that most Chinese who are involved in the stock market are inexperienced. They have seen what is happening in Greece and have hit panic mode. Unaware that some US cities have a larger economy than Greece this has caused them to bail at the speed of a thousand startled gazelles. The mum and pop investors who have jumped on board to reap the rewards have panicked.
I know and I have read the reports from the west stating that it's China's 1929 but I don't think that most of those understand the simple fact above. Wei Yao, an economist at Societe Generale, said: "A stock market crash would be undoubtedly painful, which, if materialising, could shave 0.5 to one percentage points off real GDP growth in the following 12 months." But China's GDP is running at about 7% still up from the GFC in 2008
China is still essentially a centrally-controlled economy which has so far managed to defy the usual rules of economics. This time will be no different, that even if the stock market does continue to crash, the impact will be no worse than 2007-08, when Shanghai fell by two-thirds. Yet after a massive fiscal and monetary stimulus, the wider economy barely lost a beat.
If you look at the graph above, its already started to kick and as the Chinese realise that Greece hasn't been the end of the world. they are going to start pouring back in. So jump in now folks and when you've made a quid don't forget me and send your donations. If you've got a spare AU$100,000 and are willing to invest it for someone who has absolutely no chance to ever repay you, unless I am right, please do. I'll give you ZSRenn if I'm wrong. it's all I have.
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