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Shanghai Composite Index reached 6000

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Today is Oct 15, 2007. Shanghai Composites Index continued to defy the gravity, amid the central bank (People’s Bank of China) raised bank reserve rate by 0.5 again in the weekend. The composite index closed above 6000 (Sina) for the first time.

Interestingly, history shows the CPC congress is bad for the stock market. Here is one article goes into the details of stock market performance during past CPC conferences. Today marks the opening of 17th CPC congress.

I’m not going to predict the market, either from historical perspective or futuristic view. As a famous investor once said, if history can be used to predict the (future) stock market, all the librarians (assume they read history books in the library) will be rich 🙂

librarian pic

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500 Points Less Harmonious

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All right, ever since the Chinese regulators found the silver bullet and pulled the trigger, the Shanghai composite index lost more than 500 points and a lot of people lost money or gave back the gains they already made, some of them are “crying foul” for the goverment action. Well, in stock market, just like in NBA, complaining to the referee usually won’t help. We should focus on what we can do to “stop the bleeding”, or “protect the gains”.

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Shanghai Composite Index

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Hit new high today, it closed above 3500 today (3531 to be exact).

I heard from the news on April 9, there were 180,000 new stock trading accounts being opened. As you may know the new accounts and trading volume of 1st quarter already exceeded last year’s No. Feel the power of Chinese stock investors (or speculators)? Someone did a simple calculation, let’s assume on average day 100,000 people opened the acct, and average account has 50,000 Yuan, that’s about  5 billion Yuan new money every day. If we assume 20 trading days for a month, that’s 100 billion Yuan a month. That’s on the demand (demand for stocks) side.

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