Hey y’all … if you’re looking for my “freshest” update — those quick ones that you can take to market, head on to our Facebook Page here
where I post my quick thoughts for the day and critical if you want to keep your profits, or save your capital. Anyway, yesterday, I posted about the 6% plunge in Chinese shares sure to pull down US markets, which it did, early at open. Then, it flirted with positive territory only to fall back down again towards the close. Today, the Chinese stocks again went down to like 5.1 only to reverse the losses to gain 1.2% Europe is obviously in the red, so I think it would follow that the US will also be spooked at the open, perhaps opening lower then some brave souls would do some “bargain hunting”. Now here listen, there is no forever. The bull market is not forever, and so are government rescues. Chinese market capitalization is around 4.5 Trillion and guess what, no government not even the Chinese could afford to prop up the market forever — they set out a “policy statement” once the volatility goes down, they would not have to keep buying stocks. The thing is, stocks are not-so-cheap anymore, they had a good (some would say “too good”) rally last year, and on the other hand, a faltering economy / slowing growth / profts, so you know investors eventually see that “disconnect” that is seen in the valuation (Chinese stockmarket valuation is 72 while US stockmarket is 18 ) . And experienced investors see this — boom — they hit sell.
If you want to remain in the black — check the valuation of your holdings. A Price-Earnings ratio of 17 is the fair value. Above that is not-so-cheap anymore and beware, the steeper it is, the harder it falls. AAPL meantime, is around 13.2 that’s why it is a favourite for bargain hunters.
I will start doing webinars again since I’ve settled in to my new house … if there is any topic you want covered email me at charmel@highheeledtraders.com or post a comment at the Facebook Page
https://www.facebook.com/highheeledtraders.
http://www.businessinsider.com/nearly-half-of-the-chinese-stock-market-wont-be-trading-today-2015-7
http://www.bloomberg.com/news/articles/2015-08-19/china-s-stock-index-futures-decline-following-tuesday-s-tumble
http://www.bloomberg.com/news/articles/2015-08-18/china-s-richest-traders-are-fleeing-stocks-as-the-masses-pile-in
http://www.businessinsider.com/nearly-half-of-the-chinese-stock-market-wont-be-trading-today-2015-7
