January 23, 2007
The Great Caterpillar - FXI Disconnect
Noticed CAT on the new lows list and thought it would be fun to overlay 卡特彼勒’s chart with the FXI. You can see that the folks willing to pay top dollar for Chinese stocks haven’t been paying attention to what CAT’s chart is saying.
Related: Fools Rushing in to Chinese Stocks
Cat: | Time: 9:58 am (utc+8)
January 23rd, 2007 at 11:13 am
Congrats on your site review in TAofS&C. I feel like the reveiwer missed a great deal of what makes your site great; however I hope the extra publicity brings good things to you.
January 23rd, 2007 at 11:22 am
Woodshedder: Maybe you can expound (at length I hope) about what makes this site great. ;-)
January 23rd, 2007 at 1:05 pm
I think your “Trading for Dummies” has some of the best, most intuitive presentations of technical analysis I have ever come across. I wonder if Penn found the Q&A archive, because he never specifically mentioned “Trading for Dummies.” I was disappointed that his article did not mention that part of the blog. Those setups are money!
Anyway, that is probably what I should have written the first time. He didn’t miss a great deal, he just missed one of the most important area of your blog.
January 23rd, 2007 at 1:32 pm
Woodshedder: Yes, go on, go on… ;-) Seriously, like you I was surprised he dug back into the dark days of 2001 (which pleased me), but didn’t mention the dummy lessons. I’ll wrote a post about their write-up when I get the chance (currently playing poker which takes precedence over all else).
January 23rd, 2007 at 1:41 pm
I’ve not read it but I think he should have given some constructive feedback as well. For example making publishing names of those cute chicks mandatory :-)
January 23rd, 2007 at 2:34 pm
poker - oy. stop it
January 23rd, 2007 at 4:26 pm
howard: As Woody Allen famously said about masturbation: Don’t knock my hobbies.
January 24th, 2007 at 2:28 am
I have been a Chinaskeptic ever since my second trip there, this past summer (study abroad in Shanghai).
China’s economy is a totally opaque black box. Nobody can tell you exactly HOW the 11% for 30 consecutive years happened - it’s just “the cheap labor.” But I hear stuff about unit labor costs being *negative*… and then there’s the little fact that no remotely open economy has achieved anything close to those growth rates, including postwar zero-base economies.
January 24th, 2007 at 8:42 am
Alex: There are a lot of China skeptics out there, but for those of us who did our study abroad here 15 years ago, the change today is so breathtaking that it makes us think growth rates have been *understated* if anything.
January 24th, 2007 at 9:09 am
That happens when the state makes capital virtually free.
I see this as an exact repeat of Japan. Japan’s government made interest rates virtually zero, so of course businesses were able to “grow” as much as they wanted. The French tried it with dirigisme, too. They just used current savings to mortgage long long term growth in favor of medium term (15-30 yr) growth.
China is not centrally controlled in any “day to day” sense of the word, so its state (mis)allocations of capital have run far more rampant than any of the centrally controlled idiocy of MITI or the Gaullists.
That’s my opinion, anyway. But why would construction continue at such a frenzied pace when a lot of current buildings are half empty?
Not to shamelessly pimp my blog or anything… but give me your thoughts on these posts?
Fingers of instability 2–China
Western misperceptions in re China
January 24th, 2007 at 11:43 am
BHP is sort of comparable to CAT. Anything with “China” in the name goes up every day but BHP, which is printing money actually selling the chinese d00dz stuff, had a similar 2006.
I’ve got a thing for BHP. Caught a good chunk of its run before the dumb money got in in April/May. On days like today I feel like getting back in.
January 24th, 2007 at 2:15 pm
Alex: Those posts are pretty long and deep and everything over about 100 words begins to tax me, esp. when it is *deep thinking* stuff. I have little understanding of economics and no historical perspective, so I’m the wrong guy to ask.
January 24th, 2007 at 2:21 pm
Brian: I don’t have my charts in front of me, but it makes sense that CAT and BHP would look similar. I guess the components of the FXI are more service economy things, not goods… that might explain the split.
January 25th, 2007 at 8:46 am
cm, what do you think about the JADE chart? When ever I look at it over the last few days it seems illogical. Why this much action, why now? Ah, but this stock has done similar in the past, and I’m no chartist. I’ve enjoyed some big moves up, and a few 20%, 30% and 40% haircuts since I began building a position 2.5 years ago. Small cap growth stocks frustrate those that would use traditional metrics. What do the technicals tell you? And have you been to their store yet?
January 26th, 2007 at 11:22 am
TBB: Yeah, JADE has a 16MM share float and before this recent burst of activity did less than 100K shares a day (ultra-thin), so it’s bound to be erratic. Dunno what caused the blastoff back on 1/12, maybe you can tell me?
January 27th, 2007 at 1:06 am
@CM, I certainly don’t know. We might be in the midst of one of JADE’s patented post run-up 40% haircuts.
Still, I attribute all the action it’s getting to a mention on a particular widely read blog known for technical prowess and discussion of chinese stocks ;)