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Everybody saw the crash coming. It was clearly a bubble as the Shanghai Stock Exchange went up 250% in 12 months while every indicator (company profits, manufac
by gilgoomesh 11y ago
Everybody saw the crash coming. It was clearly a bubble as the Shanghai Stock Exchange went up 250% in 12 months while every indicator (company profits, manufacturing prices, etc) were showing bad news.
https://au.finance.yahoo.com/q/bc?s=000001.SS&t=5y&l=on&z=l&q=l&c= https://au.finance.yahoo.com/q/bc?s=000001.SS&t=5y&l=on&z=l&...
Stock exchanges don't double in price year over year on bad news. That's just stupid.
I'm surprised the SSE has only fallen 30%. It still looks like it needs to lose another 30% (it's still up nearly 100% since early last year).
The only reason the entire world isn't shorting Chinese stocks is it's tricky to fight deliberate market manipulation by the Chinese government. Although I don't doubt this crash has made a few people very rich.
- bx_ 11y agoCame to basically say exactly this. The only people who didn't see it coming are the Chinese "aunties" who put everything in without any real knowledge of truthworthy advice. There's a lot of people who lost a lot of money in China this way. That's the danger of armchair expertise, I suppose.
- jmsdnns 11y agoSeriously. The average P/E ratio for a stock on the mainland indexes was 84. For a frame a reference, Facebook's is around 78. There's no way that could last.
- snarfy 11y agoWow. If that was the average, that's insane. Anybody investing in that market was gambling on the hype keeping it going.
- TheOtherHobbes 11y agoTextbook bubble. When widows and orphans are borrowing money to gamble because they've been told it's a sure thing, it's time to get out.
- jmsdnns 11y agoHere is my source, btw: http://www.bloomberg.com/news/articles/2015-06-16/china-bubble-debate-turns-to-when-not-if-stocks-will-tumble http://www.bloomberg.com/news/articles/2015-06-16/china-bubb...