7/30/2019 Chinese Stocks / SHCOMP: Value Trap

1/5

Jagkbzb Zt`jhz6 Jinzzgj \nirb _sn}@jt`cbs1)3=>3 y3>j`eebktz y gkjirobz6LJAG)LQG)DQJ)]DF)WN@

Cw Hb|gk @Csgbk

Jagkn$z DO] ds`ta o`bz k`t tsnkzintb gkt` Jagkbzb zansb }bsl`senkjb nz Jagknz ztntb%o`egkntbo nko gk|bztebkt%ibo DO] ds`ta }`igjw j`ktgkrbz z~rbbvgkd tab Jagkbzb j`s}`sntb

zbjt`sz }s`lgtncgigtw) jnrzgkd n obj`r}igkd gk zansb }sgjb%}bsl`senkjb sbintg|b t` Jagknz DO]ds`ta+

_agz tsbko gz bqnjbscntbo cw objigkgkd enkrlnjtrsgkd njtg|gtw !zbb absb nko absb' nko }``s

j`s}`sntb nrogt ztnkonsoz) agja cbigb tab $Jagkn ds`ta zt`sw$ nko j`kz}gsb t` jsbntb n jinzzgj|nirb tsn} l`s gk|bzt`sz gk Jagkbzb b~rgtgbz+

R+Z+ nko Brs`}bnk Gkogjbz

An|b J`kzgztbktiw @rt}bsl`sebo tab Zankdang J`e}`zgtb

ZbbhgkdNi}an

Sbno+Objgob+Gk|bzt+

A`eb ]`stl`ig` EnshbtJrssbktz Gk|bztgkdGobnz Og|gobkoz,Gkj`eb B_Lz Enjs`\gb

http://www.zerohedge.com/news/2012-09-27/chinese-mega-city-verge-bankruptcyhttp://www.zerohedge.com/news/2012-09-27/chinese-mega-city-verge-bankruptcyhttp://www.guardian.co.uk/business/2012/sep/09/sock-city-decline-china-economyhttp://www.guardian.co.uk/business/2012/sep/09/sock-city-decline-china-economyhttp://www.guardian.co.uk/business/2012/sep/09/sock-city-decline-china-economyhttp://www.guardian.co.uk/business/2012/sep/09/sock-city-decline-china-economyhttp://www.zerohedge.com/news/2012-09-27/chinese-mega-city-verge-bankruptcy

7/30/2019 Chinese Stocks / SHCOMP: Value Trap

2/5

Obz}gtb tab bkorsgkd Brs`}bnk Rkg`k lgzjni jsgzgz) Jagknz Zankdang J`e}`zgtb j`kzgztbktiw

rkobs}bsl`sez c`ta tab R+Z+ nko Brs`}bnk enshbtz nz Jagknz }`igtgjni bj`k`ew gta gtz

be}anzgz `k k`k%bj`k`egj gk|bztebkt%ibo ds`ta j`ktgkrbz t` ensdgknigvb tab }s`lgtncgigtw `lbqjankdb%igztbo j`e}nkgbz) sbkobsgkd tab j`rktswz zt`jh enshbtz rkn}}bnigkd t` l`sbgdk

gk|bzt`sz+

_ab d`|bskebktz gk|bztebkt }`igjgbz njt t` j`kztsngk }sg|ntb b~rgtw gk|bztebkt zgkjb tab

o`ebztgj zt`jh enshbt lngiz t` obig|bs nk nttsnjtg|b bqgt `}tg`k gk tbsez `l b~rgtw |nirntg`k+

Nz n j`kzb~rbkjb) ztnhba`iobsz gk }sg|ntb bktbs}sgzbz nsb gkjsbnzgkdiw ighbiw t` zbbh n crw`rt

ls`e n Jagkbzb ztntb%`kbo bktbs}sgzb `s f`gkt%|bktrsb }nstkbs gk `sobs t` bqgt giig~rgo

gk|bztebktz+

_ab ZZB J`e}`zgtb Gkobq o`bz k`t jn}trsb bq}`zrsb t` Jagknz kntg`kni DO] ds`ta+

Nz k`tbo nc`|b) tab ighbiw bq}inkntg`k gz tant nz c`ta tab jbktsni d`|bskebkt nko i`jnid`|bskebktz j`ktgkrb t` nii`jntb sbz`rsjbz gkt` gk|bztebkt gk k`k%sb|bkrb dbkbsntgkd lgqbo%

nzzbt gklsnztsrjtrsb }s`fbjtz nz nk bj`k`egj zrcztgtrtb l`s tab injh `l o`ebztgj j`kzre}tg`k) nko

agja }s`fbjtz o` k`t j`|bs tab j`zt `l lrkogkd) tab j`rktsw gz }s`}ndntgkd tab obztsrjtg`k `lbj`k`egj |nirb b|bk nz DO] gkjsbnzbz+

Gk Jagkn) DO] gz jnijrintbo `k tab cnzgz `l lrkoz bq}bkobo) |bszrz bj`k`egj |nirb }s`orjbo !nzgk tab Tbzt'+

_ab sbzritgkd `|bsjn}njgtw j`kztsngkz gk|bztebkt cw tab }sg|ntb zbjt`s) nz bii nz sb|bkrbz+

_ab j`ktgkrntg`k `l ogsbjtbo gk|bztebkt cw tab ztntb%`kbo j`s}`sntb zbjt`s gii dbkbsntb DO])crt gk tab }s`jbzz gii jsbntb b|bs%gkjsbnzgkd `|bsjn}njgtw nko tarz ogegkgzagkd sbtrsk `k

gk|bztebkt+

Ritgentbiw) c`ta ztntb%`kbo nko }sg|ntb zbjt`s j`s}`sntb }s`lgtz gii njagb|b n kbdntg|b |nirb)b|bk nz tab j`rktswz engktngkz nk 1" nkkrni DO] ds`ta enkontb+

_arz) Jagkbzb b~rgtgbz lngi t` }s`|gob gk|bzt`sz gta bj`k`egj sbtrskz agja nsb j`eebkzrsntbgta Jagknz `|bsnii DO] ds`ta) nko z` obz}gtb tab R+Z+ nko Brs`}bnk s`no za`z cw Zankdang

Zt`jh bqjankdb `llgjgniz nko lnzt%tsnjhgkd n}}s`|niz `l ^rniglgbo L`sbgdk Gkztgtrtg`kni Gk|bzt`s

!^LGG' n}}igjntg`kz) Jagknz zt`jh enshbt gii j`ktgkrb t` ogzn}}`gkt !nz ob}gjtbo gk tabZankdang J`e}`zgtb Gkobq }bsl`senkjb janst) za`k cbi`'+

7/30/2019 Chinese Stocks / SHCOMP: Value Trap

3/5

7/30/2019 Chinese Stocks / SHCOMP: Value Trap

4/5

A`kd H`kd%igztbo Jagkbzb j`e}nkgbz an|b gzzrbo n sbj`so krecbs `l }s`lgt nskgkdz orsgkd

3=>3) zrs}nzzgkd tab }bnh sbnjabo orsgkd tab abgdat `l tab 3==1%3==7 lgknkjgni jsgzgz) nko tabsntb `l zrja nskgkdz j`ktgkrbz t` gkjsbnzb+ _ab lnjt tant j`s}`sntb }s`lgtncgigtw gz zasgkhgkd

b|bk nz Jagknz DO] j`ktgkrbz t` gkjsbnzb !}sbo`egknktiw nz n lrkjtg`k `l ztntb%ogsbjtbo k`k%

bj`k`egj gk|bztebkt' lrstabs ztsbkdtabkz tab b|gobkjb l`s n obj`r}igkd cbtbbk j`s}`sntb

}s`lgtncgigtw nko Jagknz enjs`bj`k`egj ds`ta nko tarz j`klgsez tab tabzgz tant Jagknz zt`jhenshbt o`bz k`t }s`|gob gk|bzt`sz gta tab ebnkz t` jn}trsb bq}`zrsb t` Jagknz enjs`bj`k`egj

ds`ta zt`sw+

Sbintbo Gkl`sentg`k

Z`|bsbgdk No|gzbsz) Gkj+ anz sbzbnsjabo n Z}bjgni Sb}`st `k tab Lrtrsb `l tab Jagkbzb

Bj`k`ew) agja noosbzzbz zb|bsni ob|bi`}gkd tsbko%igkbz nllbjtgkd tab ogsbjtg`k `l Jagknz

bj`k`egj `rti``h+ Zbjtg`kz `l tab sb}`st gkjirob tab l`ii`gkd t`}gjz6

Nrogt Ztnkonsoz

Jagknz injh `l n ztsgjt sbdgeb l`s j`s}`sntb nrogt`s ztnkonsoz anz j`ktsgcrtbo t` krebs`rz

gkztnkjbz `l niibdbo nko }s`|bk lsnroz gk|`i|gkd `|bszbnz bqjankdb%igztbo Jagkbzb j`e}nkgbz)gkjirogkd sb}`stz `l n engkinko Jagkn gk|bztebkt cnkh agja niibdboiw z}bjgnigvbz gk j`rkzbigkd

}sg|ntb Jagkbzb j`e}nkgbz gk `ctngkgkd lsnroribkt igztgkdz `k `|bszbnz zt`jh bqjankdbz+ N igtnkw

`l sb|bszb ebsdbs nko bqjankdb%igztbo j`s}`sntb lsnroz gz bq}`zbo gk tab zbjtg`k `l tab sb}`stagja noosbzzbz Bqjankdb%Igztbo Jagkbzb J`e}nkw Lsnro+

Ls`ktgbs Abodb Lrkoz6 Bebsdgkd ]bsz}bjtg|bz `k Jagkn

N osnentgj zaglt gk }bsz}bjtg|bz `k Jagkn cw ibnogkd abodb lrkoz gz rkobsnw) nz jansnjtbsgvbocw On|go Bgka`skz ztntbebkt nt tab 3=>3 Gsn Z`ak Gk|bztebkt J`klbsbkjb gk Kb W`sh tant

Jagkn gz egzrkobszt``o nko gz k`t nk gk|bztebkt `}}`strkgtw+ _ab |nsg`rz sntg`knibz

rkobsiwgkd tagz tsbko nsb obzjsgcbo gk tab zbjtg`k `l tab sb}`st bktgtibo) Di`cni Enjs`bj`k`egjAbodb Lrkoz6 Bebsdgkd ]bsz}bjtg|bz `k Jagkn+

Ob}bkobkjw `k Lgqbo%Nzzbt Gk|bztebkt

Enzzg|b ztgerirz }s`dsne nko sbjbktiw nkk`rkjbo n zbj`ko) b|bk insdbs ztgerirz }s`dsne+

Rkzrztngkncib) nz k`tbo cw Os+ Inssw Inkd) Jangs `l tab lgknkjb ob}nstebkt nt tab Jagkbzb

Rkg|bszgtw `l A`kd H`kd) a` ztntbo orsgkd n z}bbja cbl`sb nk nrogbkjb gk Zabkwnkd Jgtw gkk`stabsk Ign`kgkd ]s`|gkjb `k @jt`cbs 33) 3=>> tant tab Jagkbzb sbdgeb nz gk n zbsg`rz

bj`k`egj jsgzgz nko `k tab csgkh `l cnkhsr}tjw) ztntgkd gk Jagkn) b|bsw }s`|gkjb gz n Dsbbjb+

_ab sbzritz nzz`jgntbo gta d`|bskebkt ztgerirz%lrkobo DO] ds`ta nsb obzjsgcbo gk tabl`ii`gkd t` zbjtg`kz `l tab sb}`st bktgtibo) K`k%Bj`k`egj Lgqbo%Nzzbt Gk|bztebkt nko

Zntbiigtb nko Zrslnjb Gendbz `l tab \njnkt Da`zt Jgtgbz `l Jagkn+

Zano` Cnkhgkd Zwztbe

http://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdfhttp://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdfhttp://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdfhttp://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdfhttp://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdf

7/30/2019 Chinese Stocks / SHCOMP: Value Trap

5/5

_ab bj`k`egj j`kzb~rbkjbz nttsgcrtncib t` bq}nkzg`k `l tab rkzr}bs|gzbo nko rksbdrintbo

Jagkbzb zano` cnkhgkd zwztbe) gkjirogkd nk rk}sbjbobktbo zrsdb gk i`jni d`|bskebkt obct nkoib|bsndbo }s`}bstw z}bjrintg`k) nsb bq}`zbo gk tab zbjtg`k `l tab sb}`st bktgtibo) Jagknz

Zano` Cnkhgkd Zwztbe+

Jigjh t` njjbzz `rsZ}bjgni Sb}`st `k tab Lrtrsb `l tab Jagkbzb Bj`k`ew

Nc`rt tagz Nstgjib6

_agz nstgjib nz zbkt t`6

>2?) :>2>%jagkbzb%zt`jhz%jinzzgj%|nirb%tsn}

http://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdfhttp://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdfhttp://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdfhttp://www.globalsecuritieswatch.org/special_report_on_the_future_of_chinese_economy.pdf