Following Ping An's Lead to Smash Pots All the Way

2008/3/10 15:15:31

What the biggest problem is right now can be figured out with your toes. Yet the management's farcical parade of new fund launches continues as usual. So the market has no choice but to follow Ping An's lead and smash pots all the way to the bottom. Nothing complements the absurdity and humor of the management's continuous fund launches better than making a new low today.

The management probably thinks that as long as they approve it, those fund investors (a name even more revolting than "stock investors," making you think of "famine victims") will gulp down their charity like they're starving. But what's the reality? An overly farcical gesture only drives people away—they don't even have the interest to spit on it.

The market is the most realistic thing there is. If there's a rally, if there are reasons to go up, capital arrives uninvited. Otherwise, go draw your own pie and play with it yourselves. This ID has said many times already: even cutting the stamp tax now would be useless. Why? Because there's no reason for the market to rise—is going up just about setting up another feast for the likes of Ping An?

Before this most fundamental question of fundraising regulations, which so profoundly affects the market, is resolved, the management's response can only make the market despair. What the market needs now are clear rules and clear expectations. Otherwise, all rallies are nothing but short-lived bounces that cannot constitute a genuine market move.

Technically, as said last week, without any positive developments early this week, the market making new lows isn't anything strange. That 1-minute hub from Friday has a very high probability of becoming the first hub of a new 1-minute downtrend. This morning's feeble bounce formed the third-type sell point of that hub.

Of course, since capital is massively withdrawing from large-cap stocks—let those self-righteous large-caps be bullish by themselves, let them raise money and play by themselves—this has instead extended the rally in small- and mid-cap theme stocks. These small-caps at least don't have such enormous appetites, and they're easier to control at various levels. The market's decline merely gives these stocks an opportunity for washouts or accumulation.

Given the current farcical atmosphere, capital can only pursue greater profits through even bigger speculation. When large-cap stock fundraising speculation happens so flagrantly and openly, then capital of all sizes can play the same way—each choosing their suitable speculative vehicles, letting the market continue to fracture, letting the storm of theme speculation rage even harder. This is the only choice left for any capital still wanting to play in the arena.

Today, despite the big drop, call warrants showed unusual undercurrents of activity—a fitting prelude to this new speculative behavior. And today, quite a few low-to-mid-priced stocks saw fresh capital flowing in. Using the index decline to sneak in and position—that's perfectly normal.

In a word: let the speculation rage harder. This game isn't for everyone, of course. Those without the speculative gene should just sit on their little stools, watching, and wait for fundamental changes before doing anything. Those who do have it—open your eyes wide, discover every speculative opportunity, choose what suits you best, plunder one spot and move to the next. Capital needs returns. Capital is hungry. You can't just not work before Q1 is even over.

Please understand the simplest truth: those so-called gold stocks, blue-chip stocks, and high-priced stocks of today also rose from junk stock prices in their junk stock days. Now that they're up, they get to put on airs and raise capital? Then let them all die. If we could create them, can't we forge gold from today's garbage?

Themes are all man-made. Stocks are all man-traded. Without people, nothing works. With people, what can't be created?

Signing off, goodbye.