The China Syndrome

An earlier poll indicated some interests in Chinese stock. Also I saw some new visitors came in from a different world (tech guys), none of them stayed very long. Those were Microsoft technocrats who have more fun to hack a piece of Java code than to read our oil future contracts, or to second guess if Fed is going cut the rate or not. It's true to say that my "funny" story about Cramer did not draw a lot of crowd, but I still need to put out something which can appeal a larger audience, humor, jokes, anything goes. For the hardcore market watchers, you can still find my Guru Views and Stock Picks easily, look for titles and labels, I usually put them towards the end of a story. So if things get out of hands, please let me know. I don't know, you guys stop making comments now, let me wonder if I am slowly losing you?

Well, there is a lot of "China" in the news media lately, most of them are not particularly "good". I remember one famous stock market commentator commented: China, STOP KILLING ME!!

He started like this: when I watched TV, they mentioned about cat food imported from China... poisonous..., I looked at my cats, they lied on ground motionless. I checked with the cat food I got from Kruger, sure enough, it's made in CHINA.

When my wife went to the bath room to brush her teeth before sleeping, I jumped over to check out the toothpaste, sure enough, it was made in CHINA, too. I dumped all the toys we bought for our kids, feared about the lead paint. Finally I got up and went to work, looked at the chart of Shanghai SSE index, oh my god! It's parabolic rising, not sustainable. I wanted to short this thing, but I can not buy or short any A-shares, the only ETF came close to it was FXI. Finally SSE index crashed in Shanghai market, but when I looked at the FXI, it's even creeping up, FXI did not correlate with SSE. So CHINA, you want to kill my CATs, my kids, my wife, and also you want to kill me in the stock market!!!!!!!

No kidding, he was lucky, if he could play A-share in Shanghai market, if he shorted the whole index, he probably lost his wife, his house and bankrupt his company if he is stubborned enough.

Do you know how much Shanghai index increased last year? And this year? Let me check it from Yahoo (the symbol is 000001.SS, creepy enough, best kept secret)!

Okay, here it goes, from Jan. 2006 to Jan. 2007, SSE increased 250%



From Jan. 2007 to date, remember, not the end of year yet, SSE has been doubled again!! From 2,500 to just above 5,270. Well, last Friday closed at 5,400, it dropped a little this week.

So politics is politics, some thing like "Wen Ho Lee", Monks tried to buy Clinton, influencing the election, Chinese spy's every where, stealing W-86 secrets, lead paint, which is ridiculous -- why they export toy with lead paint, no excuses. I am not here to defend China. But, business is business, we can not ignore the fact that China has 1.4 billion people, China is the "de facto" manufacturer of the world. In the last 15 years (probably, at least 10 years) the economy has grown at an annual rate of 9 - 10%, this year they were talking about 11%!!!

Will China be the next super power? I don't know, I only remember Napoleon once said, "When China wakes, she will shake the world."!!!

Don't forget Olympic Games 2008, which will be in Beijing, the Chinese Yuan($) inevitable revaluation step by step. The market Guru - Jim Rogers will sell his residence in NY and move to Shanghai, he has a young daughter and he hired several tutors to teach feverishly her Chinese since she was 3 month old.

Well, this is probably too long for average folks to bear through, to sum up, there is a lot of money to be made in Chinese stocks. I will feature a series about China and it's economy in future.

For now, buy -- ?? let me run my computer program.

It came up with PTR and GSH

Have fun,

Mkt Swimmer