chinese buying us equities

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date
chinese buying us equities <a 05-14-2007
Posted by on May 14, 2007, 5:12 pm
just last wednesday, chinese traded 377 billion yans or larger value in equities
trades than combined 12 other large asian markets.
some 368k new accounts per day have been opened by chinese investors over the
last few
weeks

when the chinese start investing their 2 trillion euros into the us markets,
perhaps
that's as good a sign as any to head for the hills


Posted by PeterL on May 15, 2007, 2:38 pm
> just last wednesday, chinese traded 377 billion yans or larger value in
equities
> trades than combined 12 other large asian markets.
> some 368k new accounts per day have been opened by chinese investors over the
last few
> weeks
>
> when the chinese start investing their 2 trillion euros into the us markets,
perhaps
> that's as good a sign as any to head for the hills


Huge amount of fresh cash coming into the market. Wouldn't that be
the time to go fully invested?


Posted by Thomas on May 15, 2007, 5:07 pm
PeterL wrote:
> Huge amount of fresh cash coming into the market. Wouldn't that be
> the time to go fully invested?

when you read the chinese news papers, it is being reported that families
are borrowing money against their furniture, getting loans, etc.. and this
money is being poured into the market

that is scary!

when the cab driver is giving you tips on investing, it's the time to sell


Posted by kastnna on May 15, 2007, 5:24 pm
I wonder how many investors would be better off if they just buried
their heads in the sand?

On any given day one can find hundreds of articles with "factual"
evidence indicating the biggest boom/bust ever is just over the
horizon.


Posted by Douglas Johnson on May 16, 2007, 5:05 am

>I wonder how many investors would be better off if they just buried
>their heads in the sand?

Almost all of them.

>On any given day one can find hundreds of articles with "factual"
>evidence indicating the biggest boom/bust ever is just over the
>horizon.

This is a major point of Nassim Nicholas Taleb in his wonderful book "Fooled by
Randomness". Most of the daily (or weekly, or monthly) information that goes by
us is just noise, without significance in a long term portfolio. This includes
daily stock prices (in spite of the fact I have a ticker running across the top
of my screen). The human brain is very good at finding patterns in things. It
is so good, it finds patterns that aren't there. Since markets have such a
large amount of noise, we humans find a large amount of false patterns. Can you
spell "head and shoulders top"?

In my mind "Fooled by Randomness" is a must read for every serious investor.
Among other things, it attempts to address the question, oft asked here, of "How
do you know if a money manager is lucky or good?".

-- Doug


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