The Bulls will Flip

BLOOMBERG
Friday, Aug 14, 2009 [4]

• Hong Kong billionaire Li Ka-shing (李嘉誠), who predicted China’s stock market bubble would burst in 2007, said the global economy would not recover this year and told investors to be “cautious” about buying shares, especially with borrowed money.
• “The worst is over for the global economy,” Li, Asia’s second-richest man, said yesterday after his companies, Cheung Kong (Holdings) Ltd (長江實業) and Hutchison Whampoa Ltd (和記黃埔), posted better-than-estimated first-half earnings.
• “Yet it’s too optimistic to say the global economy has reached a turning point. The degree of decline has shrunk but that doesn’t mean it has stopped shrinking,” he said.
• Predictions from 81-year-old Li are closely watched in Hong Kong, where the media has dubbed him “Superman” for his investing acumen.
• Home prices in the territory have risen 15 percent since March, when he told investors to buy real estate.
• Li said investors should avoid margin trading or borrowing to buy stocks when prices are too high.
• “I won’t buy stocks today,” Li said. “It’s not that I wouldn’t buy at all, but if the prices are too high, I will be very careful. For example, if the PE [price-earnings ratio] is low and the dividend yield is okay, and the stock isn’t overbought, I will buy.

bhc investment:

• Li's view is similar to bhc investment's. While Warren Buffett [3] had recently cited that he would rather buy stocks at Dow 9,000, we see the recent rally as a dead cat bounce.
• Following our bearish view, Marc Faber, Paul Tudor Jones [1], as well as Mark Mobios [2] are all calling for a correction in stocks.
• We never bought into the idea of Decoupling. The recently touted idea of Green Shoots is another garbage idea the mainstream economists and media are trying very hard to sell. They just can't stop spoon feeding us with their craps!

Once a bubble has popped, it's not going to grow back for a generation. Get your facts right and do your own reasoning. The Chinese bubble is over!

-- bhc investment

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References:

1. Tudor Investment Calls Stock Gain a Bear-Market Rally (Update2)
2. Global stocks face 30% 'correction' - Mobius
3. I am not a Pessimist! Part IV
4. World economic recovery not in sight: Li Ka-shing