Tuesday, July 21, 2015

China Post of the Day: You See What You Want to See Edition

From FT Alphaville:

Rorschach formation spotted in China stocks
Classic bullish/ bearish signal with obvious buy/ sell implications.
As Bernstein say:
The rebound over the last week means we have entered a period where everyone was right. China bulls can argue that the Shanghai Composite is still up 94% over the last twelve months. China bears can argue that the Chinese regulators have effectively taken the market out of consideration by virtue of the ham-fisted approach to reversing the sell-off. However, “I told you so” doesn’t constitute an investment recommendation.
To be clear, we lean towards the latter interpretation. And, tbh, it seems Bernstein do too. Lean, that is. Here they are on the benchmark (and relatively safer bet) Shanghai Comp, with our emphasis:
At one point early this month, the only natural level of support for the Shanghai Composite was zero. The decision of 1,000+ Shanghai- and Shenzhen-listed stocks to suspend trading (rather than take their drubbing) and the decision by the China Securities Regulatory Commission to start firing off instructions to market participants was either a breach of the CSRC’s duty to regulate – rather than try to control the market or the only option available given the proverbial rush for the exits. Regardless of your view, the tactic seemed to work. The difference between desperate and decisive is efficacy. But what now?...MUCH MORE
Some people say they see black swans but not me.
Swans Love Heart Clipart
Bald-facedly ripping myself off, from a 2013 post, "Size Matters: The Source of the Small-Cap Premium":
....*The Rock Man Syndrome comes from a close reading of Harry Nilsson's The Point!:
...The Rock Man said, "Say, babe, there ain't nothing pointless about this gig. The thing is you see what you want to see and you hear what you want to hear. You dig? Did you ever see Paris?"
"Did you ever see New Delhi?"
"Well, that's it. You see what you want to see and you hear what you want to hear." And with that the Rock Man fell soundly asleep...