“To get rich is glorious!” – Deng Xiaoping
The Chinese seem to take above Deng’s message to a whole new level. During the dot com boom in the late 90s tech stocks on the NASDAQ soared to astronomical levels. Americans from all walks of life were mesmerized by the paper “wealth” that was being created on a daily basis courtesy of Silicon Valley geniuses and Wall Street. Then the whole thing collapsed before most people had time to realize what was happening to their beloved tech stocks. Similar situation has developed in China in the past few years. As the real estate market cooled, the Chinese jumped to the stock market to make a quick buck. Millions of people from cities and villages ended up getting addicted to stocks. It is indeed shocking to see old retired poor folks in China staring at the display terminals mesmerized by the flashing of tickers.
The following table shows how much A-shares soared before the recent crash:
Click to enlarge
Source: Chinese percentages that will melt your mind, from JPM, FT Alphaville
Naming IT companies like Hithink RoyalFlush Information, Easy Money Information Co Ltd is really cute……