Chinese crash gives new investing opportunity

The 2015 Chinese stock market crash has different drivers but resembles the 2007/2008 crash in investor behaviour.

Many domestic Chinese investors made a great deal of money with the recovery in late 2008/ early 2009. My guesstimate is that any real recovery from the current crash cannot come until the 6 month freeze just introduced on large stockholders selling shares is withdrawn. But since investing in the Chinese market is now possible through a variety of funds, there is an opportunity coming. My estimate is that the bottom is when the Shanghai Composite Index is driven down to about 3,100 at which point the market will be grossly undervalued. The opportunity will come in the subsequent “bull” market when stocks will be driven up into “overvalued” territory again.

I am a strong believer in “track record” and that past behavioural patterns repeat or, at least, change very slowly.

My investments are far too small to be of any significance in the big picture. My strategies are therefore all based on detecting and riding the waves of behaviour exhibited by others. And so I will be looking to making some investments in about 4 – 6 months with a target of 30-40% growth over the following 6 months.

China investing opportunity

China investing opportunity


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