[Zannn]

I have been  characterising alot of the Chinese mainland stocks. Here is a summary of the findings.

1. Above chart is sample of a stock. Looking at the chart over a 10yr period you will think it is a speculative because it fell by 50% from peak  5 times in 10yrs.

2. The wild swings also includes  doubking in short periods of 3-5 months.

3. This stock is not a speculative stock but Ping An a blue chip.

4.The highly speculative nature of the market comes not from the stocks but the buyers. 80% of the trading activity is by small retail investors.

5. The distinct pattern in the market is low volume at the bottom and high volumes at the peaks. Indicative of highly leverage trading such as margin.

6. The sharp bottoms are jus blow off forced selling in margin accounts that see sharp selloffs followed by rebounds.

Workable strategy  for short term trading is to buy and sell contrary to the margin debt build up.

For long term investors you can just buy at bottoms which seem to be quite clear cut. For example one should be a buyer of Ping An stock now given it has sold off sharply in last 2 months given it has reached the bottom of its valuation . At this level you get both yield and safety margin.

Li Ning huge cash out