The Chinese stock market

efreddy, There are several mylotters with a serious interest in stocks. I think I speak for most of them when I say I hope you continue to post about stocks. We might get our own excellent little stock discussion group going here. That would be neat!

The shangai index has a high P/E and it's clear that any dissapointment on results could lead to sharp declines,but the market has made a strong performance (one of the reasons for the high P/E now) and success leads to further success because a lot of persons want their part of it,technical charts and analyses could protect yourself from heavy losses while you could profit from a possible further rise,but when a lot of people use that it could also be the reason for a decline or change in trend,it becomes then a selffullfilling prophecy. So even if you don't believe in technical analyses,you can't ignore them when you're on a market. But a quote of mine for more then 20 years ago : I believe in technical analyse but I don't believe the technical analist is still true,in 1986 I came to a complete other conclusion where the market should go with the same chart then most of the technical analists (while they told that the party was over after the fall from DJ 1920 to 1738 ,I came to the conclusion that we should broke the 1920 points and rise further,I changed only my opinion in Aug 1987 (DJ 2722) when these analist saw already 3000 points and told that before we should reach the 3000,we should first go back to 2248,this time I was a bit wrong too because before we reach the 3000 points (in 1989) we have reached 1738 again (in october 1987). I do know too little about the chinese market to put such a prediction (and even then it is still a prediction) but it's clear that the stockmarket crash on wall street in 1987 came on the moment when almost every sceptical was dissapeared and almost everyone saw higher prices. The sceptical on chinese markets could maybe too high yet for a serious decline.(like 1986 in the DJ) In 2001 I made a prediction of the AEX index ( Euronext Amsterdam) when they stood on 550 points (after it was fallen from 700) most saw a rise to it's early hights very soon,I told it shouldn't reach the 700 before 2012-2013,they laughed with it and said I was too pessimistic, about 2 years later I told them they were right and the 700 could be reached earlier but the AEX stood under the 250 then and most analist didn't believe the 700 could be reached in 2012-2013 that moment. We stood now on 545 points. You have better value for The AEX now then in 2001,but it was better to buy in 2003. A bull market climbs a wall of worries and a bear market starts where the eufory ends. The $ made a big rise in the first half of the eighties against the european currencies,during most of this time they gives indications the $ should fall,in 1985 the scepticals gives it up and the downtrend for the $ began.

I'm a private investor,i'm not working for an investment company but the source is from cash ,that isn't an investment compny either but is a magazine that gives information about some stocks and his markets. It was a coincidence the article came just on the moment A.Greenspan gives a warning too and it is amazing that the European markets that day react on it while the chinese market completely ignored it. The article said : of course we don't know whitch day but it seems rather it should be happen within next week or months,well one thing you can tell about the stock market,normally it should happen on the moment noone writes this sort of articles anymore and there are articles this time it's different and the only way is up. But this high P/E is a risk.

True,the high PE just means that investors have became irrational.