2021 Market Sentiment & Positioning

paladin

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I also bought heavy into tigr and futu, tanking heavily these few days although volume of trades is up? I also scratching the reason as data security or anti monopolistic measures do not apply to them
 

RedsYWNA

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I also bought heavy into tigr and futu, tanking heavily these few days although volume of trades is up? I also scratching the reason as data security or anti monopolistic measures do not apply to them
I thought there's some campaign to rein in margin debt? That will affect these 2 discount brokers.
 

moolala

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dont lose hope, just saw some global times article to say buy the dip

xi will save stonk market, else, if too many ppl lose money, he also cannot sleep well, many ppl will wan tekan him!!
 

yang_nastyman

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The put premiums on Chinese stocks bought last Friday went up easily 5x to monster gains of 20x over.

Whoever traded those are champs.
 

revhappy

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I dun think China's financial system is integrated with the world at all. The RMB is barely used for international trade and finance, China's capital account is also still closed.

China's economy will not totally collapse, but it can stagnate and rot. Most of their old economy stocks are zombie companies laden with tons of debt, I cant imagine myself investing in these things.

And yes DYODD, nobody knows what the future will look like, I could be wrong about China in the end.

This is a nice balanced article. She is an insider from China.

https://lillianli.substack.com/p/let-the-bullets-fly-for-a-while
Here is her twitter link:

https://twitter.com/lillianmli
 

aurvandil

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This is my 2 cents reading of the Hang Seng charts.

The big obvious target that the Hang Seng could fall to is 21,000. This was the low when COVID first hit. Along the way, we should see good support at 23,000. This was the price level when the current move up started. The market is currently around 25,000. Best case therefore is that it will drop another 2,000 pts. Worst case is it will go down another 4,000 pts. There is currently nothing to suggest that it is about to make a sharp V shaped recovery.

This is assuming no further regulatory shocks, good or bad.
 
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d5dude

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This is a nice balanced article. She is an insider from China.

https://lillianli.substack.com/p/let-the-bullets-fly-for-a-while
Here is her twitter link:

https://twitter.com/lillianmli

The article was written on the 16th, before the CCP deleted an entire sector of the economy.

Nobody sane is going to want to invest in China after this fiasco, it has nothing to do with tech regulation anymore, its an assault on capitalism. If you are a fund manager and you own China stocks, how are you going to answer to your clients when CCP unilaterally decide that your companies can no longer legally make a profit (therefore they are worthless)?

What happened to the private edu sector can happen to any other sector of the economy in China, the trust is gone for now...
 

churnmaster

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The article was written on the 16th, before the CCP deleted an entire sector of the economy.

Nobody sane is going to want to invest in China after this fiasco, it has nothing to do with tech regulation anymore, its an assault on capitalism. If you are a fund manager and you own China stocks, how are you going to answer to your clients when CCP unilaterally decide that your companies can no longer legally make a profit (therefore they are worthless)?

What happened to the private edu sector can happen to any other sector of the economy in China, the trust is gone for now...
The trust was never there, otherwise Shanghai composite wouldn’t have failed to reach its 2007 highs. When domestic investors don’t see value in their market, outsiders have to take notice of the same. Let’s see how it all panes out over the next few weeks.
 

revhappy

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This is my 2 cents reading of the Hang Seng charts.

The big obvious target that the Hang Seng could fall to is 21,000. This was the low when COVID first hit. Along the way, we should see good support at 23,000. This was the price level when the current move up started. The market is currently around 25,000. Best case therefore is that it will drop another 2,000 pts. Worst case is it will go down another 4,000 pts. There is currently nothing to suggest that it is about to make a sharp V shaped recovery.

This is assuming no further regulatory shocks, good or bad.
I would be surprised if this kind of damage stays limited to Hong Kong and China and not spread out as a contagion to Asia and the world. The supply chains and companies are all interlinked. We cannot have euphoria is one part of the globe and doom in another part.
 

paladin

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The article was written on the 16th, before the CCP deleted an entire sector of the economy.

Nobody sane is going to want to invest in China after this fiasco, it has nothing to do with tech regulation anymore, its an assault on capitalism. If you are a fund manager and you own China stocks, how are you going to answer to your clients when CCP unilaterally decide that your companies can no longer legally make a profit (therefore they are worthless)?

What happened to the private edu sector can happen to any other sector of the economy in China, the trust is gone for now...
That is the reason for many Chinese state own companies, they are zombie like, no innovation, not growing and waiting for aid for a sunset industry. Profit is the basic incentives that motivates people to innovate. Nobody likes to work hard for little incentives, especially the smart people.

Chinese are a practical lot, as a race. The reason why CCP was stable in the past was because it encouraged innovation and the Chinese feel proud of their digital payments, high speed trains, ecommerce innovations etc and they also benefited from innovations. In other words, CCP threw money at the people (tax rebates for tech industry) and people earned more. Ecommerce reduced prices from ease of comparing similar products and the consumer benefited. Similarly, ratings on restaurants and shops weed out the weak ones and encourage them to continue to improve, so i doubt CCP would harm the chinese companies so much, that unstability happens and the people' lose instead of gain. Already, Evergrande Group needs a bailout and if more companies in tech, property and private education need a bailout, not sure how would that affect employment rates, which directly affects birth rates. If CCP stops throwing money, but collect money from people, its reign will not be stable.

I still maintain the chinese government wants to collect more fines from the profitable tech companies to make up for the shortfall in tax collection last year due to covid-19. But i do not think it will keep doing that to cause structural unemployment or doomed its 2025 plans to lead the world in several tech related industries
 

yang_nastyman

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I would be surprised if this kind of damage stays limited to Hong Kong and China and not spread out as a contagion to Asia and the world. The supply chains and companies are all interlinked. We cannot have euphoria is one part of the globe and doom in another part.
This is a good point.

This was the sort of thinking for many last Jan when there was COVID outbreak in China.

Many believed it would be localized to China.

China is such a big part of the global economy right now.

If China sneezes, the world will get a cold.

Puts on EVERYTHING!
 

limster

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You have a very good timing skill (y)

Actually buying today or yesterday afternoon, both would have been ok. I was busy so I couldn't key in buy order yesterday afternoon. Lucky got enough time to key in the order this morning.

I am prepared to average down further. =:p
 

d5dude

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The trust was never there, otherwise Shanghai composite wouldn’t have failed to reach its 2007 highs. When domestic investors don’t see value in their market, outsiders have to take notice of the same. Let’s see how it all panes out over the next few weeks.

Yes people never really trusted the CCP but I think trust was not the main issue in 2007. The shanghai composite was in a bubble back then, P/E was like nearly 70X, thats a lot for companies that aren't growing their earnings quickly.

I have always been sanguine about China companies despite their relatively poor performance, but I have changed my mind now.
 

d5dude

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I would be surprised if this kind of damage stays limited to Hong Kong and China and not spread out as a contagion to Asia and the world. The supply chains and companies are all interlinked. We cannot have euphoria is one part of the globe and doom in another part.

One thing that I noticed about the global economy recently is that it started to decouple a few years ago, after Trump took office. A good 50% of S&P500's revenue used to be from outside the US (most of it in China), its now under 30%, I think any trouble in China is less likely to hit US companies very badly now.
 

d5dude

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That is the reason for many Chinese state own companies, they are zombie like, no innovation, not growing and waiting for aid for a sunset industry. Profit is the basic incentives that motivates people to innovate. Nobody likes to work hard for little incentives, especially the smart people.

Chinese are a practical lot, as a race. The reason why CCP was stable in the past was because it encouraged innovation and the Chinese feel proud of their digital payments, high speed trains, ecommerce innovations etc and they also benefited from innovations. In other words, CCP threw money at the people (tax rebates for tech industry) and people earned more. Ecommerce reduced prices from ease of comparing similar products and the consumer benefited. Similarly, ratings on restaurants and shops weed out the weak ones and encourage them to continue to improve, so i doubt CCP would harm the chinese companies so much, that unstability happens and the people' lose instead of gain. Already, Evergrande Group needs a bailout and if more companies in tech, property and private education need a bailout, not sure how would that affect employment rates, which directly affects birth rates. If CCP stops throwing money, but collect money from people, its reign will not be stable.

I still maintain the chinese government wants to collect more fines from the profitable tech companies to make up for the shortfall in tax collection last year due to covid-19. But i do not think it will keep doing that to cause structural unemployment or doomed its 2025 plans to lead the world in several tech related industries

Yes innovation and competition is always good for consumers, this is why I was very skeptical when the CCP decided to shut down the entire private edu sector, more companies in this space would ultimately lead to lower prices for parents, shutting them down would have the opposite effect, it'd create a black market economy with sky high prices. This is Economics 101.

I think this was an easy target because most of these companies are foreign owned, much like the tech companies in China, most of them are majority owned by foreigners. Its very easy to get popular support for targeting foreigners now that China is locked in a cold war with the west.
 

paladin

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Meanwhile, the state-backed China Daily on Thursday cited unnamed sources saying China remained supportive of domestic companies seeking to list overseas and that regulators would soon unveil more measures to further open capital market to foreign entities.
 
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