2015-04-22

Understand China's Stock Market in One Picture

Here's the only picture you need to understand China's stock bull market that began in summer 2014. It is the stock chart of Baoding Tianwei Baobian Electric (600550), the first state-owned company to declare bankruptcy. Included is the Shanghai Composite for comparison.

Outside of some large companies with heavy institutional ownership, stock prices reflect psychology and not much else.


Here's a longer look at Baoding Tianwei. At the peak of the prior bull market, it traded for 14 times its price in 2001.

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