How can we, as North Americans, profit from China's demise? Is there a Chinese index that I can short? Because it sure as shit not going to go back up, not after the recent announcement of buying up bad chinese stocks.
The ZAR angle gives you exposure to a possible slowdown in the huge Chinese investment in Africa, plus the dire politics in SA. The downside is people are already short the unit.
In hindsight, prices today might look like ideal entries for short positions months from now if this is just the beginning of a major decline. In markets like this, no action should be taken without a thorough fundamental and technical analysis. Making an ill-researched assumption one way or the other will cause a lot of people on both sides of the market to lose money.
If your point is that "it always goes back to the fundamentals" and therefore fundamentally-driven investors will always win in the long run, I put to you that there is so much accumulated capital over centuries in Europe, that the ECB can wield this to fight the fundamentals for far longer than you can stay solvent.
Consequently:
When we're in a regime-shift scenario, as now, fast decision making is a much better value-adding skill than weeks of fundamental analysis which can be swept aside at the whim of a policy maker.
Therefore I completely disagree with you. Those who are currently holding on to fundamental analysis are losing money hand over fist in a market which values connections and reading of policy maker tea leaves. I give you as evidence, the EURUSD exchange rate. Here is the most liquid series on earth, and one which is barely moving on fundamentals, namely the existential crisis which the euro itself is facing. It is manipulated and no amount of conscientous fundamental analysis will help. Instead fundamentals will just bog you down in irrelevant detail and a false identification of the drivers. Techs, positioning, and fast moving gut feel is what matters in this market.
Basically: there is no definitive winning formula in finance. You have to use your instinct and flit between strategies as the state of the world requires. Sometimes that's fundamentals. Right now it isn't.
You're being far too literal here my friend.
The instruments you use, your timing, horizon, leverage, money management, etc. all affect your ability to realize gains, even if your overall investment or trading thesis is correct. For instance, I could be on the right side of a trade but a margin call could screw it all up.
When all is said and done, people playing China long and people playing China short will both end up losing money during this volatile period. Not because they were all wrong about what was going to happen but because many of them won't be positioned perfectly or have the wherewithal to see their positions through.
> If your point is that "it always goes back to the fundamentals" and therefore fundamentally-driven investors will always win in the long run
I wrote "In markets like this, no action should be taken without a thorough fundamental and technical analysis." How in the world did that lead you to conclude that I was arguing "'it always goes back to the fundamentals' and therefore fundamentally-driven investors will always win in the long run"? Why did you completely ignore my reference to technicals? It seems you're searching for an argument that doesn't exist.
If you really like to gamble you can buy puts on some of the bigger ones.
Of course it will. It's not even down on the year.
It's profit taking which triggered a whole bunch of stop-losses, margin calls and panic selling. Wait for the volatility to die down, and buy H-shares (or A-shares if you have the stomach).
To understand why it's going down so fast, you need to understand how fast it went up. As it stands today, the SSE is still up almost 100% in the last 12 months...
amen to that quote...this one is a little too hot for me, might stick to the other ETFs mentioned below.
Do NOT day trade either (for the same reason).
If it makes you feel better, the smart money is already out, that's what triggered the crash in the first place. Now everyone who took out margin is trying to get out, and eventually the market will level out. Probably much sooner than people expect.