The Shanghai stock index fell 8.8% yesterday, the biggest fall in a decade. Stock markets around the world followed suit and of course stock market gurus immediately disgorged nonsense in newspapers and on TV shows.
The Chinese economy was on the verge of collapse,... the growth miracle was coming to an end...
All those stock market gurus forgot a simple fact: the Chinese New Year holiday was over, every Chinese had spent much too much and those owning shares sold a few to put some cash in their wallets. It's as simple as that. If millions of Chinese do that around the same time, stock prices are going to drop a bit. Nothing to get worried about. They will rise again after the next paycheck when investors again have some cash to invest. because they still believe share prices will rise and they will be able to earn a buck.
Stock markets around the world fell, because the gurus forgot the Year of the Pig had arrived. It's common sense, stupid!
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