Taoyuan Nights

Several newspapers published a syndicated article recently, based on a survey of investor* behaviour in the Shanghai market (SSE).

I’ve already talked about how completely fracked up these folk are, and I think the numbers in this article are a particularly excellent quantitive demonstration of this fact.

ChinaHR.com, a Web-based job placing firm, said that of the 2,500 responses this month to a survey… just 10 percent said they had a firm grasp of the market, while 56 percent said they were learning as they went, according to the poll. It did not account for the remaining 34 percent.

Dear lord! It’s either noob hell or noob heaven depending on your viewpoint. If you’re living in Shanghai, here’s a clue about the real way to make money. During a gold rush, sell shovels. Or better still, make shovels. Start up an ‘investment advice’ centre. Perhaps even a training center for ‘investment advisors’. Promise people the path to infinite wealth if they attend your course and give you money.

After all, this strategy has worked in the western markets for hundreds of years. So I bet there’s far more easy money and potential for getting rich to be found in selling dreams to suckers, than in spinning the gunbarrel of stocktrading on the SSE.

Meanwhile, here are some more quotes (taken from the Taipei times) on the current boom.

“China’s securities regulator issued a second public warning within two weeks on risks involved in the country’s soaring stock market, state media reported yesterday, while former US Federal Reserve chairman Alan Greenspan warned China’s red-hot stock market was heading for a steep correction.”

Meanwhile, speculators in Shanghai reacted by putting their fingers in their ears and singing “la, la, we’re not listening…” for several hours.

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*investors – Being frank, Shanghai ‘investors’ are to investment, what a serial one-night-stander is to romance… (to paraphrase Buffett).