Good Stuff

Investment Good Luck
Wednesday, June 13, 2007 - FreeMarketNews.com
The old saying that one should either leap quickly or not at all could well be true for investors, both foreign and domestic, as they seek their fortunes in China's booming stock market. A second relevant saying opines that one should never confuse brains with a bull market. The moral would seem to be "remain humble and be quick." Mark Tier's Investor’s Edge writes:"When the average investor makes money, he'll often attribute his success to his 'superior ability.' While his failures are usually the result of "bad luck."An examination of 'good luck’ usually shows that it's really the result of being in the right place at the right time, knowing what to look for, and being prepared to act instantly."Stratfor.com notes:"The easiest way to contain a runaway stock market is to let it self-destruct. When a speculative bubble forms, sooner or later it will pop and the market will suffer a series of cataclysmic crashes. Such events are traumatic, but they are essential to both restoring rational values and impressing upon overenthusiastic investors that the stock market is not a one-way trip to riches. "That is critically important when one considers that cadres of individual investors in China -- holding more than 70 percent of shares on the Shanghai Stock Exchange -- have invested their entire livelihoods into their equity stakes. Thus, the potential for social unrest and violence is much higher for disgruntled Chinese than U.S. investors..."Stratfor concludes:"China does not yet have a corporate bond market at all, and its derivatives market and commodity markets are so new and underdeveloped that a large surge of capital into them now would simply institutionalize all of the stock market's shortcomings into them as well. This leaves Chinese investors with few options -- and Beijing with a stock market that simply cannot slow down without collapsing altogether." Staff Reports - Free-Market News Network