When looking at the performance of equities on the mainland, I find it laughable that many pundits seem hell-bent on calling a major China bubble right now. As illustrated by the FXI (ETF for China) below, stocks have essentially been dead money for two years. After a monstrous run up and subsequent crash over the past seven years, the flat period does not surprise me. While it sure does reek of malaise, this long period of basing can actually be viewed as constructive. In other words, I would rather bet on bubble tea than a China bubble.
Members of The PPT and 12631 will most certainly need to click here to see the intriguing July seasonality statistics for FXI.
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