iCapital Comments On Shanghai SSE

On Star Business: Will rally in Shanghai stock market resume

Some passages caught my attention.

• However, the 2005-2007 bull market was overdone as the rise, although it was to partially make up for the time lost from 2001 to 2005, became too speculative. Can one say the same thing about the 2008-2009 rally?

What's up doc?

Current market rally for SSE is not speculative????

Well if he says it ain't so, who are we to argue? :)

The last few passages were better.

• Once the current correction is over, the rally in Shanghai will resume. However, one needs to note that the Shanghai market does not have to move in tandem with the economic cycle on a quarterly or annual basis. A good example would be from 2001 to 2005.

Well let's see.

If market correction is over what could happen?

Hmmm... it could either go up or it go sideways.

And some actually do define a market that moves sideways after a plunge as a phase of market correction.

Hence, by logical reasoning, it's a no brainer (for some) that once the market correction is over, then logically the market should move up.

The next sentence.

• However, one needs to note that the Shanghai market does not have to move in tandem with the economic cycle on a quarterly or annual basis.

Hmmm.... I agree with that statement. Yes I do. :D

But... but... buttt.... butttt..... what would call a market that does not move in tandem with economic cycle?

Correct me if I am wrong but won't you call this a market that is moving without fundamentals?

And if so, isn't this a speculative market?

The next passage..

• Whether the current correction will be over soon or it will be a prolonged pause is hard to say but one thing is clear: a repeat of the 2007-2008 or 2001 to 2005 bear market is highly unlikely and a repeat of the 2005-2007 bull market is also unlikely.

Errr.... confusing here for me lah. Sorry lah if I cannot understand.

It just said once the market correction is over, the rally in Shanghai stock market will resume.

And if correction is over, surely then a bear market is impossible to say the very least because if the bear market would to happen, the how could the correction be over?

So I guess it's saying the rally in Shanghai market will continue but it will not be the same as the 2005-2007 bull market. I hope I am not wrong here. So a small bull rally, is it?

The last passage was my favourite.

• Given the steep and irrational plunge in 2008, it is not surprising that the subsequent rally was so strong but the future trend from now onwards would be more subdued, more gradual, relative to the movements in 2007, 2008 and 2009.

Errr.... errrr.... errrrrhm.... irrational plunge in 2008?

Huh?

Huh?

Is iCapital telling that there is absolutely no justification for the SSE to plunge in 2008????

?