Everyone is Talking about Stock

14:26

I am waiting for a friend in Starbucks to chat about business. He is about 5 minutes late, and I have some time to pull out my laptop to write something about what I observed in Starbucks.

On my rights, two guys are talking about stock. They are talking about some stock at 1.70 RMB/share, and discussing whether they should sell it or buy more. Then their topic shifted to foreign exchange. The guy looks like a professional stock broker.

On the left, several people are also seriously discussing about stock. They looks exciting.

Within just two years, the topics people talk about changed dramatically from house to stock. Shanghai is a center for business. People think about money, talk about money, and care about money. The majority follows the economical trends closely. That is just the nature of city. Good or bad? Well. Hard to say. I am not the money-driven type, and I need more space. I will move to another seat to avoid all kinds of stock terms running into my ears.

So, what is the next? What people will talk after 2010? Criss, or sad stories?

6 Comments

  1. In the US today people are also discussing the stock markets and various factors which are driving stock prices downward. Continuing bad news in the subprime mortgage industry with several subprime mortgage lenders going broke. it is very risky business to lend money to people with poor credit. I expect mortgage lending standards to get much higher and a continuing softening of the housing market.

  2. Working in Pudong, unfortunately I’m not hanging out in the same part of it. As there is no Starbucks around, I go everyday to the 兰州拉面 for lunch and people are talking about the quality of the meat, the increasing price of the rice and wheat, the rainy day that will help to clean the greasy pavement in front of the restaurant and other common chitchat topics ;-) I guess it won’t change a lot until 2010 for them.

    Anyone joining me for a lunch ?

  3. Everyone talks stock except human being nowadays. Just joke.

    I think it’s natural to talk about stock. We live, we need money. Several years ago, the book Poor Dad,Rich Dad is popular, it talks about money makes money. It’s a good habit that you invest with your extra money.

    Don’t just think like elite. Don’t blame others. At least, not everyone can pay money for Starbucks everyday. If you only spent 2000RMB a month and still thought in this way, it’s good. Otherwise, shut up!

    I think some elite are very strange in China. Got salary from global company, blame others. Have you really done something for this country?

  4. If everyone is talking about stocks, it means a stock market crash is imminent. The Chinese stock markets currently trade at a PER of 33 — a researcher once found out that over the long term (a 100-year time frame) the average PER of American stocks to be 16 and that anything above 30 signals a very high probability of a correction back to the average. This, despite the invention of railways, radio, television, telephone, the personal computer, mass media etc.

    Once the market in China corrects, all those who look like stock market Rambos today will instead look like fools. This is especially true since this generation of Chinese has almost no experience with stock markets, this being a new phenomenon for them.

  5. There is a great anecdote about 1929 stock market crash right before the great depression: Joe Kennedy stopped to get his shoes shined, and the shoe shine boy was giving him stock tips and telling him how to get rich in stocks. That day, he sold all the stock he owned, and the market crashed soon after.

    The moral of the story: when the shoeshine boys start talking about something, make sure you aren’t in it.

    You know, “shoeshine boys” here means “all ordinary people”…

  6. That Joe Kennedy anecdote is excellent! I also met a “shoeshine boy”.

    I sold last Sunday all my Chinese stock after the portfolio had shrunken by 8 per cent or so. I made a handsome profit, though.

    The odds that the market flattens are imminent. The shock waves came from the US where the consumer confidence declined. Please keep in mind that China and the US have a weird “balance of horror”. The savings rate in the US is zero and people shop until they drop. The huge federal budget deficit is covered by borrowing. China and Japan have already given one trillion dollars. Now China was forced to revaluate the yuan. This means that the Americans buy less – and the credit given to Washington becomes less worth. China has begun to eye on Euro.

    The Chinese government has succeeded to curbe the rising housing prices. Now it will fight the stock market speculators. The interest rate rose. The financial watchdog will make sure that people don’t use consumer loans to buy stock. Last but not least – the tax on foreign enterprises will be increased almost by 70 per cent from 2008.

    Even the governmet admits all this will reduce the GNP growth by more that 20 per cent.

    My shoeshine boy was a small civil servant whom I know well and we often discuss the stock market. He was almost outraged to hear about my stock sales: “how do you imagine to know better than Warren Buffett? Buffett swears the boom will continue until the 2008 Olympics!

    Then he told he’s planning to invest his parents’ pension savings on stock – to reap the last hefty profits before the Olympics…

    I shrugged and walked away in silence.

    M.Gron, Ph.D.

    Associate Professor

    Xiamen, Fujian

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