The Bull Market No One Can Stop
Thursday, May 31st, 2007
By Michael Lombardi, MBA for Profit Confidential
Will anything stop the booming Chinese stock market?
Two days ago, the Chinese government tripled the tax it levies on stock trading in an effort to cool the demand for Chinese securities.
With more than 20 million stock trading accounts opened by its citizens in China so far this year, the total number of stock trading accounts in China has now surpassed 100 million.
The new regime in China is slowing moving from a communism controlled state, and the Chinese love the capitalism they are being permitted to participate in. The bottom line is that there is more demand for equities than equities themselves. This has been sending the Chinese stock market sharply higher this year.
The Chinese government has tried to slow the demand for its equities in the past. As recently as this past February, the government tried to curb investing in Chinese equities by increasing borrowing requirements for buying stocks. That move sent the key Chinese CSI 300 index down for only a few days before the speculation started up again.
I wrote earlier this week about how former Fed Chief Alan Greenspan is wrong in expecting a meltdown for the Chinese stock market. In this universe, there isn’t an investment trend stronger than one that keeps moving in a single direction. This latest move by the Chinese government will have only a temporary negative impact on Chinese stocks.
With 100 million stock brokerage accounts chasing very few Chinese listed public companies, this is a bull market no one can stop. I expect to see the Chinese stock market continue its strong uptrend.
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Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter



