Froth in the Chinese Stock Market
This article provides a few interesting anecdotes suggesting that the chinese stock market is short-term overbought and getting quite frothy:
China's stocks are the most expensive among the world's major markets after a rally that's drawn record numbers of investors. The number of brokerage accounts topped 99 million this year, with more than 300,000 opened daily. Students, pensioners and maids -- many with scant investment knowledge -- are among those who are using their savings and even living expenses to play the market, according to Chinese media reports.And more here, including:
About 10 percent of maids in Shanghai have resigned because they make more money trading shares, the government-run Eastday Web site reported on April 24, citing a local employment agency.
A Shanghai training company has set aside half an hour twice a day for employees to play the market, the Oriental Morning Post reported on May 17, without identifying the company.
When a friend whispered several stock tips to Yan Caigen last year, the investor snapped up 30,000 shares in one of them, a cement company. The reason: the stock's auspicious ticker code, 600881, which contains a double-eight.
"I believe good codes will bring good luck," says Mr. Yan, who parks himself most days in front of a trading screen at a Shanghai brokerage, Shenyin & Wanguo Securities Co. Indeed, shares in Jilin Yatai (Group) Co., the cement company he bought, promptly tripled, earning him about $50,000. Mr. Yan gives credit for the performance to the two "8s" in the stock's numeric ticker symbol, which he considers a lucky combination.
Part superstition and part self-fulfilling prophecy, numerology is a basic trading strategy in China. The philosophy reflects the widespread belief in Chinese society that numbers contain clues to good fortune.