Wednesday, 30 May 2007
Chinese Blood Bath
See Bloomberg article here.
However, several distinguished individuals do not think that the contraction will affect the international economy as China is "a relatively small casino".
Full article here.
Tuesday, 29 May 2007
Irrational Exuberance in China [Fundsupermart.com]
Yale Professor, Robert Shiller, who correctly called the 2000 dot com boom a bubble, has said a high degree of "irrational exuberance" among investors could lead to a major correction in the Chinese market in the next few months, which could have a knock-on effect for the world economy.
Get the full take here
Prem Watsa [Canadian Financial Post]
Politicizing China's stock market bubble
According to one theory, what keeps the retail investors and speculators bullish is their belief that the government won't take harsh measures to prick the bubble before or shortly after the 17th National Congress of the Chinese Communist Party (CCP) in the autumn, because Beijing wants to see people smiling during the all-important meeting of the party elite. On the other hand, a market crash would mean a big loss of face for the party, and in that case heads would roll, as some officials would be held responsible.
Monday, 28 May 2007
The Chinese Rally
In the wake of this rally, the Chinese Education ministry has also warned college students not to dabble in the stock market. More here.
The Dangers of Discarding Value [Fool.com]
Full story here.
Friday, 25 May 2007
Setting the Standard for Ethical Business [LJWorld.com]
Wanted: A Central Banker who can curb market mania [NYT]
Read about the continuing Chinese mania here
Bill Miller lagging S&P [thestreet.com]
Your first weekend piece here
Why Bubbles benefit the Economy
What's my Guru talking about? [Fool.com]
Not all Chinese investors know what they are doing
Thursday, 24 May 2007
Value Investing in Brazil?
Here are some links on Tarpon & its IPO:
Women shoes are hotter than ICBC
Enjoy this IHT/Bloomberg piece here
Wednesday, 23 May 2007
Pick of the Day: Buffett speaks to Charlie Rose
Watch the Exclusive Video here
A Growth Sector Too Dangerous to Ignore
Notes from BRK's AGM
Access the notes here
Tuesday, 22 May 2007
Value Investing in Today's Markets
But in today's streaking stock market, there's very little that no one wants. And that's the problem for the value camp.
How Buffet, Graham and Others Gave Me Religion
My conversion came at a great cost. For a time, like many of you after the crash that began in 2000, I had lost a lot of money on paper and jeopardized mine and my loved one's futures. But I got religion, worked hard, and today have beaten the market since before the crash, putting my household on an even stronger footing than before.
Having survived and prospered, I am making it my goal in life to spread the news to anyone who will listen.
Railroads bask in Buffett's flavor
OMAHA, Neb. - Freight railroads and their investors can feel confident no new railroads will try to create a competing network — the cost is too high.
That enduring competitive advantage, combined with strong demand from shippers, is part of why billionaire Warren Buffett ‘s company, Berkshire Hathaway Inc., invested in three freight railroads. But investors who are thinking about following Buffett will have to determine whether strong business fundamentals or Buffett excitement drove the recent rise in rail stocks.
The $300 Trillion Time Bomb (Portfolio.com)
For hundreds of years, the way to solve problems in the financial market was clear: Get Wall Street’s titans in one place and knock heads. It took only 24 brokers gathered under a buttonwood tree to form what became the New York Stock Exchange. J. Pierpont Morgan locked several dozen bankers inside his famous library on Madison Avenue to solve the panic of 1907. And in 1998, New York Fed president William McDonough convened representatives from the biggest Wall Street firms, 14 of which then bailed out Long-Term Capital Management.
Monday, 21 May 2007
Property boom driving Singapore (BBC News)
Bershire's Latest Holdings
Li Ka Shing warns of Chinese bubble
Booming China Stock tests Govt's will
Millions of Chinese investors, trading on mobile phones or in brokerage halls around the country, shrugged off the central bank's monetary tightening, which was partly designed to prevent the market from overheating.
Instead, investors pushed up stocks in massive turnover that was about 10 times year-ago levels.
In China, land of red-hot stocks, B-shares are white-hot (AFP)
These days, Zhang Nin gladly sacrifices her short lunch breaks so she can
queue up at the bank and buy US dollars for local currency. The 24-year-old
marketing executive at a Shanghai wine company needs the money to buy
hard-currency B-shares, which recently have emerged as an even hotter
commodity than the sizzling local-currency A-shares. "I bought some
B-shares on Tuesday and two days later they had risen by about 15 percent,"
she said. "That's amazing, as A-shares I bought three weeks ago only earned
me about 20 percent of profit.
China's stock markets have skyrocketed in recent days and weeks, boosted by
massive inflows of individual investor money.
But while the A-share market has boomed, retail investors have found that
some B-shares issued by the same companies have risen even faster. A-shares
are denominated in the Chinese currency and were originally reserved for
local investors, while previously only foreigners could buy B-shares,
denominated in either US dollars or Hong Kong dollars.
The distinctions between the two have disappeared somewhat as local people
have been permitted to buy B-shares since early this decade, while
foreigners are allowed into the A-share market via qualified foreign
institutional investors. Most of the 110 B-shares are also listed on the
A-share market and they are generally cheaper than their A-share peers,
with an average discount of 20-30 percent, said Zhang Qi, an analyst with
Haitong Securities. "The price disparity of A-shares and B-shares has
always been there," Zhang said.
"But it was only in late April that retail investors suddenly woke up to
find the value of B-shares was low from the past bearish years and started
to speculate on them." The Shanghai B-share Index surged 80 percent in the
month ending Thursday, compared with a 12-percent rise in the benchmark
index in the same period. Turnover Thursday was more than seven billion
dollars, more than double that of Taiwan's market. This sharp risen made it
seem worth the trouble for Zhang, the wine company executive, to reshuffle
"I think B-shares are 'safer' -- they rise faster and cost less," she said.
"I am considering cutting some lukewarm A-share holdings and moving the
funds to the B-share market." The B-share market was originally established
in an attempt to channel foreign funds into listed firms, but foreigners
have shown little interest. "Foreign investors have better options like the
Hong Kong market if they want to invest in Chinese firms, that's why
B-share market is now dominated by retail investors -- they prefer
inexpensive stocks," said Gui Haoming with Shenyin Wanguo Securities.
The once marginalised B-share market, with a market capitalization merely
two percent of the 2.3-trillion-dollar A-share market, is seeing sharper
rises now, but it may also become a spearhead should a correction come. "I
think some B issues are obviously overvalued as their fundamentals have
barely changed from years ago. We had better be cautious," said Gui. "The
B-share market would be more vulnerable to large swings as most
participants are individuals," he said. Even stock punters like Zhang Nin,
who said her trading decisions were mainly based on the advice of friends,
has become more aware of the risks. "It's too crazy," she said, "there are
so many people in the bank that I usually have to wait more than one hour."
"I'm uncertain whether I shall put more money into stocks."
Sunday, 20 May 2007
Lampert took big stake in Citigroup: SEC filing
Wally on BRK and Dell
Watch Video here
1st-Time Investors Buy Up Chinese Stocks
AP Business Writer
BEIJING — After watching Chinese stock prices gallop upward for months, Ding Xiurui wanted a piece of the action. The 45-year-old office worker stood in line at a bustling brokerage Friday to open her first trading account. She brought her sister, who opened an account too. They joined millions of other novice investors who are jumping into a market that has soared to dizzying heights, with prices up nearly 50 percent this year.
"We still can make money," Ding said as she stood at the counter at Tiantong Securities with the paperwork for her new account. Asked what stocks she would buy, Ding said, "I don't know. I'm still learning."Continued here
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