Chinese Markets Go Into Overdrive 🇨🇳

by 8 Jul, 2020

Chinese Markets Go Into Overdrive 

It’s one thing for individual stocks to go zoom in a matter of hours. It’s another thing for a stock market index or even currencies to rocket up, as those investments represent broader, less volatile, and longer-term bets. If an index rises or falls more than 3% in a single day, that’s big news. 

Well, big news!

The futures market for China’s SSE (Shanghai) 50 index of large-cap stocks was up 9.1% on Monday. The most popular tickers in China were Alibaba, Tencent, Baidu, and Baozun. The Invstr community has chosen to follow rather than participate as China’s stock market is less developed than it’s American counterpart. 

The madness is giving some investors flashbacks to a bubble that burst in 2015. State media talked up stocks, brokers talked up stocks, the plumber talked up stocks, and soon everyone was pulling the same direction; up, up, and then aggressively down. If everyone’s “right,” everyone’s wrong.

We all play the game a little different, though, and some participants in this rally; a lot different. 

Zhang Ruiqi has gained a name for himself amid the current craze, running his United Fortune Fund. It filters through a massive database of stocks for those bubbling up the most with momentum. He then goes all-in on one day, and all-out the next. 

Zhang’s all the rage in China for his 108% return year-to-date, but some investors think he’s just riding the stonk market rally while masquerading as a clever quant, who uses complex mathematic models to make money.

Perhaps then, not everyone is pulling in the same direction. We’ll revisit Zhang in six months before passing judgment!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

 

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