Is this a large artificial bubble...meaning that the value of the market is incorrect and it's starting to correct itself, but Chinese authorities are attempting to stop it and maintain the inflated value?
It really looks that way. Yesterday the Chinese market was the only one to not lose value amid the economic turmoil yesterday, and that was only because of the propping up the Chinese government did. It seems that the efforts to prop up the Chinese market are not working as well as hoped now...
It means the average market cap of companies on the chinese stock market was at 70 months of earnings. For example, a company making 100 a month would be valued at 7000 dollars at 70 P/E, while only at 2130 at 21.3 P/E.
Basically, what he's insinuating is Chinese companies were vastly overvalued and it shows in this basic metric.
Is this a large artificial bubble...meaning that the value of the market is incorrect and it's starting to correct itself, but Chinese authorities are attempting to stop it and maintain the inflated value?
It really looks that way. Yesterday the Chinese market was the only one to not lose value amid the economic turmoil yesterday, and that was only because of the propping up the Chinese government did. It seems that the efforts to prop up the Chinese market are not working as well as hoped now...
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