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By Loretta O’Connor I try to keep one eye on the alternative energy sector, even though I am quite tired of hearing about my “carbon footprint.” The more I read the less eco-friendly I find myself acting. |
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| Great Investment Idea Just have a look at this |
| Sunday, 11 November 2007 | ||||||||
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Is there any doubt that there’s a speculative bubble in Chinese companies? With that in mind, reader John S asked: Alibaba, China's second-most popular Internet search engine behind Baidu (BIDU), is going public today on the Hong Kong stock exchange. The IPO is priced at $13.50, but shares are expected to hit the tape at almost twice that price. Charles, could this be true? Regards, John John, Not only was this true, but the expectation was surpassed. Alibaba shares tripled on opening day. But that shouldn’t be a shocker. China recently issued an IPO for their oil company, PetroChina. On the first day, the market cap exceeded $1 trillion. $1 TRILLION!!!!! In other words, the market is saying that a state-owned oil company (which would never be run as well as a private company) is worth more than TWICE as much as Exxon Mobil. Whoever said the markets are efficient was nuts. After all, most investors make money from market inefficiencies. And day trading wouldn’t exist if it weren’t for the market being inefficient. While there might be some companies in China that truly have a lot of promise, I don’t think any of them could be worth $1 trillion. Expect PetroChina shares to fall. And don’t be shocked if shares of Alibaba follow the same rout. Source : IDE
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