Cross-posted from Investing in Chinese Stocks.
Yesterday, a headline article at iFeng discussed a possible crash in May and right on cue, stocks dropped.
Today, Xinhua News published four articles today telling investors not to panic and to BTFD.
Article 1: China’s Slow Bull 常规降温遭过度解读 A股将慢牛
Over 1000 stocks fell more than 4% on Monday, but 71 were still limit up (including “old faithful” Baofeng), same as before. No worries!
People are talking about the end of bull market or a intermediate-term peak and information about rising risk is coming in thick, but market history is full of collapses after a big run up.
BTFD.
Article 2: Investors Adopt Wait and See Attitude As Market Adjustment Pressure Accumulates 市场调整压力逐步累积 投资者观望情绪渐浓
Due to IPOs and negative factors, the stock market dropped.
As the market sharply higher, the market adjustment pressures gradually accumulated more and more investors tend to lighten up on the sidelines.
According to a survey report financial intelligence rating on the 5th released, in May 2015 China A-share hedge fund managers confidence index was 91.30, last month dropped 7.61 percentage points, this is the index for two consecutive months low at the critical point. Data show that private equity fund managers in May A-cap stocks pessimistic, more and more private equity tend to lighten up.
…Looking ahead, Yang Delong, who believe that, despite the adjustment in May highlighted the pressure, but in the medium term, the bull market pattern has not changed.
BTFD.
Article 3: Why did the market slump? 沪深股市缘何大幅下挫？
On a deeper level, the Shanghai Composite Index doubled in less than a year, more than half of the shares traded at more than 100 times earnings, a number of sectors have a local bubble. In addition, margin the balance of the two markets to break 1.7 trillion yuan, far exceeding one trillion yuan at the beginning of this year, a lot of leveraged funds market increases the volatility of the stock market.
…Respondents believe that the stock market volatility adjustment, investors should be rational treatment market, digging a reasonable valuation, promising listed companies, do not blindly chasing hot stocks not to borrow money, we must do risk prevention.
Dial it back on the margin, this isn’t Macau.
Article 4: This Crash Is A Baptism, After the Rain is a Rainbow 股市遭遇重创不失为一场洗礼 风雨过后更见彩虹
The headline is BTFD, but in what can only be described as a seriously wrong turn, the article asks readers to channel their inner Hamlet.
Everyone’s heart has a Hamlet, how to view the stock market?
“Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.”
“Though this be madness, yet there is method in’t.”
“Conscience doth make cowards of us all.”
“When sorrows come, they come not single spies. But in battalions!”
“Something is rotten in the state of Denmark.”
After all, a collapse is the baptism of new investors, it will continue tomorrow, after the storms the market will be an even more beautiful rainbow. “Pigs do not continue to fly,” value investing has no borders, rational investment should become the consensus of investors.
Sell your pigs now!
Bloomberg’s coverage:
