2024 Week 40

You've got to know when to hold 'em Know when to fold 'em Know when to walk away And know when to run

Squeezing in a quick note for week 40.

The Chinese stock market started to go on a tear and the Chinese were all forced to go on a long national holiday.

The scenario is like a beautiful woman inviting a young man to a party with the catch that the party is going to happens in a weeks time.

While he is supposed to be going on with his life during that week, the only thing that the young man can think of is the beautiful woman.

Could the week dampen his hormone or raised it further?

Personal experience tells me that the hormone should peak just right before the party…

What is going through the young man’s head is exactly what is going in within every Chinese’s investor head right now.

Anticipation and Fantasy galore!

Unlike Chinese investors, international investors has been gifted with a short HK holiday and a week long trading session.

We got to the party early with many beautiful women. The problem is that the ones who may be arriving tomorrow may be even more ravishing.

Most of us had our fantasy fulfilled and may seek more tomorrow and possibly the week after.

A hedonistic lifestyle seems predestined for most. Many will fall into the decadence and everyone knows what decadence will leads to.

Whenever a trading market begins, I repeat “The Gambler” by Kenny Roger on my speaker.

You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run

-Kenny Roger

Lets do a thought experiment…

If the Chinese stock market shoots up like a rocket tomorrow, the day after or for the whole of the week, what would be going in the head of the every traders and regulators in China?

Every party will eventually come to an end.

The young man will eventually be exhausted and have no strength even for mere dalliance with another beautiful woman.

The Chinese regulator will be thinking that this looks like the Chinese stock market rally of 2014-2015.

Instead of giving it a boost, the regulators may pour some water on man’s head to clear his mind.

As what President Xi will most likely say,

“Do not just party and have fun, what you should do is to have kids and grow old with the beautiful woman.”

-Future President Xi’s Quote

Then it is too late to run.