On that day iShares Hong Kong closed @ $17.68. Yesterday? $21.42 and Hang Sang closed up >3% overnight on top of yesterday's close. This is a 21% move for an entire index; if you had bought a week earlier it was an even greater move (38% from the absolute low).
An equivalent 21% move of the Dow is 3000 points in about 5 weeks, and 38% from the bottom would be well over 5000 points. Frothy? Overextended? Too much too soon? Crazy? Nuts? I'd say. But anyone taking profits right now in any stock is looking dumb. The mania continues. Remember there is no party like a Ben Bernanke party. Money is flooding world markets, if not from petro dollars, then from huge trade imbalances in coffers of countries like China, and if that was not enough, then the central banks of Europe and US are adding with their own torrent of cash (M3 where are you?) - all this money has to slosh around somewhere.
As an aside Greenspan finally got around to calling China bubble-licious - he called the NASDAQ top too with his infamous irrational exuberance comment - about 5 years too early though and you left about 80% upside on the table. If the timing is similar, this means China should top out around oh... 2012.
Long iShares Hong Kong in fund; no personal position
2 comments:
It's interesting to see how many Asian (esp Chinese) stocks have similar-looking charts. Normal up until the mid-August faultline and then rocketing upwards with little to no downward movement. So many of these charts look the same, regardless of the company.
That's exactly the point. There is no differntiation. Anything "Asian" is rocketing. Much like the dot com bubble - it didn't matter what you did - just that you were measured in eye balls, and you were part of a new paradigm. And it always helped when the name of your company ended in .com. Replace .com with Asia or China and away we go. That said, people were calling for a top in 99 so things can go on much longer than any of us logically think. There must be some pullback near term at some point (you'd think).
Again, I try to discern the China economy from the China market - China economy (along with the seemingly ignored Indian economy) are massive once in lifetime economies. The market is reflecting that (and more). And ignoring all potential stumbling blocks in those economies near term. Much like is happening here. I continue to go back to the thesis of too much supply (of money) chasing too little product (equity) in world markets. G8 economies seem committed to flooding the market with cash, and then throw on top Middle Eastern petro dollars and China/India newfound riches and you have a confluence of new cash needing a home.
Post a Comment