Friday, April 21, 2006

Chinese Stock Market and US Stock Market

I am sorry for missing an article for yesterday! There were two reasons: One was that I was busy on trading in Chinese stock market; other one was because I could not pick any US stock in the current situation.

Today (or last night in Eastern Time), 4/21/06, the Chinese stock market reached another yearly new high. It has gone up 22% since January 1, 2006. After a 4 years decline, the Chinese market is on its up track.

Last summer, after many years, I went back to China. I saw many things are very interesting. The most attractive thing is the Chinese stock market. Chinese stock market was very quite because it hurt most of its investors. From its last top in June, 2001, while the economy advancing stably, the Chinese stock market had lost more than 50% of its value. From my opinion, most of its stocks are under value. It was a great investment opportunity.

When I came back from China, I quickly set up a Chinese stock account and started trade Chinese stock through the internet. From early of September when I started my first trade, the Chinese market went down for less than 3 month, and then started its rally. From its lowest point till today, the Chinese stock market has gone up for more then 30%. As of today, I still think the most of the Chinese stocks are at bargain price!

Probably because the tradition or the ideology is different with western, the Chinese stock market behaves much differently. Even though both stock markets use the same terminologies, perhaps the different reading and understanding, the trading skill sets are far away from each other. To us, the peoples who know US market better, it is very challengeable. While, I paid a lot of tuition, or mistakes, for the difference, now it is the time to begin the harvest.

My dear readers, you should look into the Chinese stock market also. There are more chances then the US stock market.

I felt the difference strongly. Last night, both markets reached their new highs and both markets might face possible adjustments. In Chinese market, I could easily cash my gains from some advanced stocks, and transfer into some stocks that have more potentials. In US market, I could not.

If you review my recent stock picks, you should noticed that I shifted to “defensive” area already. I focused on metals, oil and even the penny stock. The main reason is not only the oil or gold price, but also because many other stocks (on my list) do not have big potential for introduce. In fact, I have started looking for stocks that I can bet it down since last week. Meanwhile, I don’t think now is the time to release them yet.

Last night, I didn’t have a good one for buying because it is too risky; and I didn’t have a good one for selling because it is too early. So, writing nothing probably was my better selection.

I feel bad for missing a homework and for readers who visit my blog daily. But by watching today’s market, I think my choice is right.

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