Not sure if its fair just to look at Alibaba as a proxy for Chinese investing (but the whole Jack Ma thing is a pretty good example that investing in that market is not what we are used to).
The below is from the MSCI index for China Large and Mid Caps (available to international investors) https://www.ishares.com/us/products/239619/ishares-msci-china-etf#/
My top level summary is that they were a good investment last decade but certainly didn’t bounce back out of COVID like the rest of the markets and only time will tell if they will be any good this decade with all the other macro factors going on. Would have to ask @Saiton to do his charting magic to see if there is an investment that could be made by surfing one of the waves ;)
Bronte Capital with a longer piece - Amalthea_Letter_202409.pdf I always find interesting.
Markets are looking frothy again especially in in the US.
AFR - Wall Street: Bullishness persists in what Bank of America calls a ‘bubble dream’ (afr.com)
The Federal Reserve is slashing interest rates, oil is crashing, China is finally moving more determinedly to bolster growth and global stock markets are poised to reset their record high.
“It’s a bubble dream,” according to Bank of America equity strategist Michael Hartnett. His data had another $US10.9 billion ($15.8 billion) flowing into US equities in the week ended September 25.
Fed cutting into recession is negative for risk assets, but Fed cutting with no recession is positive and investors firmly of [the] view Fed and China is sufficient policy easing to short-circuit recession risk,” Mr Hartnett wrote.
The latest American Association of Individual Investors survey confirms the continuing optimism for US equities. The S&P 500 reset its closing high record for a 42nd time on Thursday, though ended modestly lower on Friday.
While bullishness eased modestly to 49.7 per cent this week, it is above its historical average of 37.5 per cent for the 46th time in 47 weeks. In contrast, bearish sentiment, expectations that stock prices will fall over the next six months, decreased 2.7 percentage points to 23.7 per cent. It’s now below its historical average of 31 per cent for the sixth time in seven weeks.
But Doug Ramsey at The Leuthold Group said a potential inflection point was near. “Speculative psychology is not truly bubbly, but valuations are perilously close to that threshold. Obviously, it’s the latter that will have a much more profound impact on future equity returns.”
Mr Ramsey said valuation thresholds his firm assessed in April seem to have become important “resistance levels”, with the market unable to push significantly above any of them on a sustained basis. That’s in part because underlying fundamentals have exhibited recent growth that’s well above the long-term trend.
Vanda Research, however, is seeing some hesitation emerge among individual stock investors, saying its data shows that they are no longer chasing the rally, and may retain that positioning for the rest of the year.
“To be clear, retail flows into capital markets are still robust and currently sit at the three-year average of $US1.12 billion a day,” Vanda senior vice president of research Marco Iachini and vice president of data science Lucas Mantle said in a note. Vanda provides tactical and market strategy advice to institutional investors.
Mr Iachini and Mr Mantle, who track the trading moves of smaller investors, said retail activity has shifted from aggressively buying dips to wait-and-see mode.
“The next set of hurdles – i.e., labour market data, the start of the third-quarter earnings season, and the US election – will likely dictate whether some of these underlying trends will sustain or fade in the coming weeks,” the two strategists said.
Lyn Alden's next newsletter is out.
https://www.lynalden.com/september-2024-newsletter/