By Edward Lawrence Emerson
The Chinese stockmarket has exploded over the last year by something approaching 80%, and that type of growth tends to bring with it the equivalent of “investor vertigo”; folks start to get dizzy and afraid when they look down.
Add in an ailing housing market and the fact that 60% of China’s new stockholders have the equivalent of a junior high school education (6% of them can’t even read), and you have to assume that type of inexperienced market fuel will make for some shaky trajectories.
And, in perspective (which is a wonderful place to visit), that market’s price earnings are miles lower than was the case during the acceleration towards the crash of 2008/09. See Josh Brown for the embiggenable charts here.
You can read more about where that market might be going here.
For now, onto this week’s stockmarket sherpas, who are…
“Goldman Sachs and ShittyBank…”
StockTwits – Howard Lindzon
Forgetting all the stealing, cheating, lying and government loans (gifts), Goldman Sachs is up 150 percent since the crisis in 2008. Here are how the rest of the ‘banks’ have fared… Read
“What, Didn’t You See It Coming…?”
Points of Few – Alan Steel
Like that monster under your bed as a child – as real now as it was then – the rampant market scepticism birthed in the crossfire hurricanes of 2002/02 and 2008/09, still has investors shivering beneath a thin sheet of cash deposits, Yellen-fearing bond funds and index trackers… Read
“The Investor Crowd Is Frazzled…”
The View from Manhattan – Mike Williams
Ah yes, just as the doctor ordered, sentment is falling and prices, oddly – at least in the case of the NASDAQ – are at or near all-time highs.
After a horrendous period of chop and a thinly-vieled trade range, the investor crowd is frazzled… Read
“Here Comes Those Tears Again…”
Phil’s Stock World – Phil Davis
It must be the 3rd week of the month because that’s the week the S&P gets to 2,120. It’s happened every month since February and the reason it happens is because it gives fund managers the chance to sell call options to suckers who bet the market will break out and go higher while they continue to lighten up on their holdings… Read
“Four Signs of a Pending Bear Market…”
A Wealth of Common Sense – Ben Carlson
Fund manager Leon Cooperman’s take on the four reasons we typically see a bear market in stocks:
1. Stocks anticipate an on-coming recession
2. Euphoria and exuberance
3. An unpredictable geopolitical event
4. The Fed takes away the punch bowl by raising interest rates… Read
“Quality vs Quantity: What’s Really Necessary…?”
Behavior Gap – Carl Richards
How do you prepare to climb a mountain? Collect everything that you’re sure you will need. Then, remove one item at a time until you get down to what you can carry. This method of climbing is called alpine style, or climbing light. There’s a life lesson in there… Read
“Because Market Correlations Aren’t Constant…”
The Reformed Broker – Josh Brown
It’s frustrating to an unsophisticated investor when three quarters of their portfolio is going up and one quarter is going down. The response is almost always something along the lines of “Why can’t we just own the stuff that’s going up now…?” Read
More Stockmarket Sherpas…
“Home, Home on the Trading Range…” Read
“Coming to your Emotional Rescue…” Read
“From Buttonwood to Bull Markets and Bear Truths…” Read