China stock market in free fall....no one paying any mind.
- Thread starter S2007S
- Start date
US stock market is not, from your retirement to government pensions, there are no other venues to fund the obligations. If China stock market is gone, they still have the family support system in place.
Yes, also only from the mid/late-60's US investors shrug off the fear of the decline that started in 1929!
I know of someone who went back into the market just before the financial crisis and once it started to climb back up took all money out of their account and made a promise never to buy stocks ever again. To this day they never went back in.
No one and I mean no one would ever expect a market drop like the 1929 or 1987 or 1999 or 2008 crisis.
Now a days everyone knows the fed will come in and backstpp the entire market from falling .....
The rise from late October up until Jan 19th, if this was the opposite where the markets were in free fall for 10 out of 11 weeks the fed would have already cut rates by 2% and would have injected hundreds of billions of dollars to slow the drop and most likely issue another round of QE.
Yes.
Fake accounting. Simple. The uncurrent assets on their balance sheets are basically equating to zero.
The problem with China stocks is that the CCP doesn't give a f*ck about shareholder returns. There's no reason to expect listed companies to provide anything at all in the way of distributed profits for the foreseeable future, at the very least while Xi Jinping is in charge.
There's also the very real prospect of open war between China and the USA/West within the next decade - I'd assign this at least a 50% probably, in which case any positions you own in China/HK stocks or other China-based assets will be zeroed out.
Buying low is all well and good, but sometimes cheap stuff is cheap for excellent reasons, and may in fact still be expensive. Just ask the guys stuck holding Russian shares which looked so attractive at 10%+ earnings yields. Personally I"d consider buying China stuff at a dividend yield (not earnings yield) of 15%, and would definitely put some money in at 25%, but FXI yield is currently like 350bps.
There's also the very real prospect of open war between China and the USA/West within the next decade - I'd assign this at least a 50% probably, in which case any positions you own in China/HK stocks or other China-based assets will be zeroed out.
Buying low is all well and good, but sometimes cheap stuff is cheap for excellent reasons, and may in fact still be expensive. Just ask the guys stuck holding Russian shares which looked so attractive at 10%+ earnings yields. Personally I"d consider buying China stuff at a dividend yield (not earnings yield) of 15%, and would definitely put some money in at 25%, but FXI yield is currently like 350bps.