Is the China Bubble about to burst?

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China is in the midst of a bubble. The Shanghai Composite Index, which is up over 130%, dropped 5% in one day after a Chinese official referred to the rise (perhaps best symbolized by Chinese homeowners who are taking out home equity loans to speculate in the stock market) as a bubble.

The current face of China's investor is a crazed, irrational and manic one. Many are trying to cash in on the boom with little or no experience with investing.

Despite all this, there's no doubt that China is growing fast with increased activity from U.S. private equity firms. Is the bull rising too fast and irrationally?

Comments

Anonymous said…
Hey CAD$,

It's not a matter of IF, but WHEN. Kinda reminds me of the tech bubble.

Do you have any Chinese stocks?

FT
http://www.MillionDollarJourney.com
February 5, 2007 at 8:55 AM
torontoinvestor said…
My only exposure to Chinese stocks was through a company called 51JOB. I had bought this company as a contrarian play as it had fallen quite a bit in the last year. I've since disposed of it with a modest 8% gain.

How about yourself?
February 5, 2007 at 9:24 AM
Anonymous said…
I have a small position in HF, a chinese fertilizer company. It's been good to be thus far, so i'll be holding on until the technicals show me the signs to sell.

FT
February 5, 2007 at 12:07 PM
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