By DAN DORFMAN
May 2, 2008
The two-day, 13.5% surge in the Chinese stock market last week was reminiscent of a moon shot. To put the spectacular rise in perspective, the Dow would have to jump about 1,800 points to equal that gain.
It’s a noteworthy sign that the enticing, go-go Chinese market — a reflection of the planet’s speediest economic grower — has recaptured its lost momentum and is ready to roar again following a bloody 45% decline from its recent high, some international investment trackers say.
Maybe so, but the global money manager George Soros has his trepidations, declaring in a recent TV interview that China “is a bubble waiting to burst.” Fears of a slowdown from its double-digit economic growth and the jump in inflation to 8.3%, about double last year’s rate, also worry some China watchers.
The London money manager Marcus Raab disagrees with the worriers. “I can appreciate the anger over China’s crackdown on antigovernment protesters in Tibet and its human rights abuses, and I’m angry, too,” he says. “But if the name of the investment game is to make money, which it is, you have to own China because you go with growth and no economy is growing faster.”
Mr. Raab, a principal of Raab Associates, concedes the Chinese market is rife with inflated stock values and is not without risk. He hastened to add, though, that he “would say the same thing about any market in the world,” and went on to note that prior to the recent gain, “it has been a slow investment boat to China, but I would look for that boat to pick up real speed.” In other words, he’s suggesting more moon shots ahead in China.
A tracker of international markets at Weiss Research in Jupiter, Fla., Larry Edelson, is also gung ho about what he considers the world’s most exciting market. His advice to clients: “Buy the heck out of China and I wouldn’t waste another minute.”
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