Speculation Must Be Vindicated -- China's Rise Equally Requires Its Own Soros and Quantum Fund (2004-9-15)

Recently, Soros has been attacking oil again -- the recent decline in oil prices is connected to him and his crowd. In the average person's mind, Soros is a speculator, but he is a lawful speculator because he does not violate market rules. Of course, Soros has a mission, and many people discuss his relationship with the CIA. Even if Soros is an important chess piece in America's financial strategy, so what? China's rise equally requires its own Soros and Quantum Fund.

Speculation means investing at the opportune moment. Speculation is a profound discipline and an even more profound technique. A true speculator can only be a true philosopher -- without penetrating all of humanity's greed and fear, how could one possibly find the lethal strike within the materialized trends of human psychological behavior? A true speculator must achieve the realm of selflessness -- if there is still personal fear and greed, one will inevitably be swallowed by the vortex of human fear and greed. True speculation is a continuous process of cultivation, moving through the blade's edge of complex market environments like the legendary butcher Pao Ding carving an ox.

For a nation's financial strategy, there must be a cohort of people with genuine speculative vision. What China currently lacks most is precisely this. When China's financial markets are fully opened, battles of varying scales will erupt one after another. Without well-trained, speculation-seasoned talent, how could one possibly defeat the speculators swarming from around the world? How could one possibly protect the stability of the financial system? The approach of beating speculation to death with a single stick not only cannot suppress speculation -- it will let speculation crush us instead.

Finally, a digression. On September 9th I wrote "Respecting the Market Is the Basic Quality of Every Regulator -- Let Us Warmly Applaud the Resounding Slap the Market Has Given to the Stock Market Regulators," which included: "Breaking below 1300 points means clear skies ahead for the short term. The coming rebound's strength will be proportional to the intensity of the short-term plunge -- the harder the drop, the stronger the rebound. Some sectors will see a sub-intermediate-level rally. Of course, I won't specify which, but what I can say is: the more problematic, the more promising." Yesterday there was a post "Farewell, Laura Cha -- Commentary on the State Council's Latest Personnel Changes: Removing Laura Cha as Vice Chairwoman of the CSRC." In the Shenshui section that couldn't be accessed, I wrote: "This is now a completely standard pattern -- breaking down and pulling back after 3 days. The next two days are crucial -- watch the volume. If volume follows through, the sub-intermediate rally begins; otherwise, more bottoming is needed. As for individual stocks, as I've said, the more problematic the more promising. Look at what hit recent highs today. Trash and gold are both delusory distinctions -- cling to gold and gold becomes trash too." Today, volume appeared right at the open, but it got a bit large toward the end -- tomorrow there will definitely be fluctuations. The key remains volume: as long as volume doesn't dramatically shrink, everything is fine; otherwise, be careful. As for specific stocks, look at what hit the daily limit today, and you'll understand what "the more problematic the more promising" and "trash and gold are both delusory distinctions -- cling to gold and gold becomes trash too" mean. Of course, once the rally continues, sector rotation is the only normal thing. Note: you must have sector-level thinking. Big money nowadays doesn't play just one stock -- they move entire sectors at once.