Howard posted a nice blog about housing/China/solar. Go check it out (words famously communicated by Jack from ‘The Shining’).
I do not intend, nor care, to beat the bulls to death with a steal pipe (donned with a rubber grip). But, I will say, in all my years on Wall Street, I’ve learned to spot tops in sectors–like a space walking magician. As a matter of fact, somewhere buried within my old blog, I alluded to identifying tops in overheated sectors, which usually occurs after 7 weeks of rocketry.
Also, whatever the investment banking fuckers are peddling: beware. They always distribute the “hot” or “in” investment theme, at or damn close near the nuclear bombed out top. A bunch of homo-hammering top tickers they are.
So, now, we have a classic supply/demand situation, where the supply of bullshit Chinese stocks are outstripping the demand from retarded, soon to be broke, investors—all thanks to the “deal guys.”
During 2007, Wall Street set a record, booking 234 deals, raising more than 54 billion dollars. To put things in perspective, back in 2003, only 15 billion dollars was raised on 68 deals.
Back then, deal guys were living skinny. Now those coked out scum bags are fat slobs, shoveling Chinese shit in NYC.
My point: Wall Street is pushing China/Solar too hard. Eventually, stocks like [[JASO]], [[FSLR]], [[YGE]], [[AKNS]], [[CHL]], [[LFC]] and [[BIDU]] will get fucked up like a teenage dreamer, in a Freddy Kruger flic.
With my money, I’m betting on “the wheels of shit” to fall off the Chinese stock wagon, this year, via [[FXP]].
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Also, Brazil ($BVSP) looks to be rolling over. There are no ultras yet but you can short EWZ.
I have felt the same on many tech stocks like goog, aapl, rimm, grmn. Their growth is over but the big guys all keep putting their money in them, trying to sucker the small guy in.
For those of you who think this is a correction, here are some numbers that may interest you.
In 2003, the four largest brokers had assets totaling $2.027 trillion with a net worth of $98 billion. That yields an equity percent of 4.83%…think of it as margin…they were holding securities and other assets with 4.83% account equity.
Fast forward to 2007…now the assets total $4.352 trillion and a net worth of $148 billion, a margin account of 3.40%.
Now assume there has been no sub prime mess or other problems causing a write down of assets. But because of current turmoil management feels it would be prudent to bring the equity percentage back to where it was 4 years ago at 4.83%. That means the four brokers alone would have to liquidate almost $1.3 trillion in assets.
For CitiCorp to get back to the same capital ratio it had in 2003, it would have to liquidate $720 billion in assets.
For perspective, the market capitalization of the S&P 500 is about $12.5 trillion.
Deleveraging is not fun.
Cue JJ spam comments about shorting FSLR in 3…2….1…
Really, did you have to encourage him?
-DT
China, like MVIS, is probably a year away from sorting itself out… both waiting for fundamentals to build on. And especially in China, you have to be a ‘stock picker.’ Individual stories of ‘business-combined-with-cultural growth’ will be the key to successfully navigating Chinese bullshit stocks with a shot in 2008. Culture is a major driver in China… it’s a country based on deep traditions, and I am not talking about communism. Here’s one example… in the U.S. prescription drug pipelines feed our ‘fix it with a pill’ mentality. In China, there is a holistic approach to medicine that goes back centuries. It doesn’t matter if Americans think herbs are bullshit, in Chinese culture… herbs are God. A perfect example is KUN. To the average U.S. investor, it appears they are selling snake oil. But in China, right down to how they name and market their products, they are selling to the consumer based on tapping into the deep traditional roots of the culture. Is it a growth story? Anybody’s guess in 2008. Western influences could kill it, or with their new broadcast deal and 75% profit margins they could knock the cover off the ball.
It’s clear though, you have to understand Chinese culture when it comes to identifying potential success stories. (which in many cases is the polar opposite of American culture, though they are developing some rabid western tastes.) Infrastructure, commodities, automotive, health care/pharmaceuticals, media, and many more are all in play from a sheer volume standpoint as the country ramps up.
There will likely be some run up on bullshit stocks into the Olympics… yes, a few lotto weeks will feed the machine no doubt. The real story though will come 2 quarters AFTER the Olympics. When the tourists leave, which companies are best prepared to follow through? I’m looking at China 2 ways in 2008. Who will benefit from the Olympics? And who will benefit AFTER. And it will be 2 succinct lists. More to come when i have time…
MVIS in pc mag –
http://www.pcmag.com/article2/0,2704,2242716,00.asp
that article in pc mag and the king 5 link have been making the rounds… i always maintain caution optimism in regard to MVIS, but I’ve heard from at least 30 people in the last few days who just keep using the word ‘amazing.’
coupled with news like this:
http://www.marketwatch.com/News/Story/Story.aspx?guid={9957F419-F00E-4683-A18F-520184D6B9ED}&siteid=nbs
it’s pretty easy to see where this technology is going and it’s solid place in the consumer market. the only real question to me is how soon people will buy in… still a few lingering issues which we all know, and i am sure the market will sort out the pricing over the coming months with it’s usual combination of exuberance and stupidity.
i just read ducati’s China post…
If you think the success of Chinese stocks is related to the U.S. consumer, that’s only a fraction of the story. A 19% fraction according to Ducati. I am not a chart guy, but to me, go back and look at U.S. growth during it’s great industrialization. That to me is a more apples to apples comparison. China is in the process of industrializing… they’ve opened up the river all the way to Chun King (now the major industrial city in China) 900 or so miles inland in order to mobilize/modernize their huge labor pool. Millions more consumers exiting the bicycle age and developing a taste for consumerism. China success is tied to China… not us. How U.S. companies expand business into China though is worth noting… these are the opportunities I am specifically looking for….
Holy Fucking Premiums on the options…
Didn’t JJ just reverse and go long on FSLR?
If so, back up the Biffy Trucks!
I agree that the Shanghai stocks are trading at very high multiples by our standards. But there is no alternative for the Chinese to invest elsewhere, so the A-shares and B-shares will only keep going higher as long as the Chinese government doesn’t prick the bubble. What happens in the US and the global markets don’t matter much to the closed stock markets inside China. (Sorry, your FXP only works on the Hang Seng H-shares. They are very different animals. Hong Kong, similar to Taiwan, is a much more open market and operates separately.)
Despite all these China bubble shenanigans, the Chinese economy will still grow at 10% in 2008, the same percentage it has been doing consistently per annum over the last 25 years. They won’t stop producing just because we stop buying their stuff, they will just keep the products for themselves. That may end up working better for them than for us.
Now those coked out scum bags are fat slobs…
Chortle.
We say the same things about you retard stock shaggers.
“Sorry, your FXP only works on the Hang Seng H-shares. They are very different animals”
Wrong, retard.
The two biggest components of FXP are CHL and LFC.
Learn up, son.
Fuck you Jake.
doodoo bidu is going to tap out about 250mil from the collective of market makers if it stays where it is. China Online, I hate Brean Murray, it’s personal – fuck them both in the wrong hole.
I changed my mind, this shit is found money. I’m going to buy everything with a ticker name from China now, and hold it til JUly, then sell it. It’s the Olympics trade, and no one has figured out how to make money on it until me, until now. Ah heck no – sell the pigs.
CHL and LFC are ADRs pegged to 0941.HK and 2628.HK. Retard.
I was already trading Hong Kong stocks before their IPOs.
Holly donkey dicks Godzilla is stomping on China already in trading.
Chuck:
Let me rephrase my insult to you.
The index linked to the FXP are listed as H shares. However, they are all Chinese companies, that also are listed as A shares too.
Essentially, buying FXP is a direct play against China, albeit listed in Hong Kong.
Your failure to recognize this fact makes you are corn can fucking son of a bitch.
Thanks in advance.
Wrong again. LFC is listed in Shanghai (601628), not CHL. Matter of fact, the majority of the FXI components are not listed in Shanghai.
This discussion is pointless. You are saying betting again CHL and LFC means betting against China. You are at best betting against two Chinese stocks. Dipshit. If that’s what you think shorting China is, here’s my advice: buy BIDU puts.
I’m out. Enough time wasting here.
Dipshit:
LFC has h shares listed. Do your fucking homework.
It doesn’t matter where they are listed, as long as they represent business in China.
Naturally, you and your sub 100 IQ will be unable to understand that.
Liar.
You went nowhere.
He went to jail for a couple of years…
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