| If everyone is talking about stocks, it means a stock market crash is imminent. The Chinese stock markets currently trade at a PER of 33 -- a researcher once found out that over the long term (a 100-year time frame) the average PER of American stocks to be 16 and that anything above 30 signals a very high probability of a correction back to the average. This, despite the invention of railways, radio, television, telephone, the personal computer, mass media etc. Once the market in China corrects, all those who look like stock market Rambos today will instead look like fools. This is especially true since this generation of Chinese has almost no experience with stock markets, this being a new phenomenon for them. |
Everyone is Talking about Stock