Chinese Stocks Slid 6.5%

Based on the benchmark Shanghai Composite Index, Chinese stocks slid by 6.5% yesterday morning. The last time China’s shares went into a mini-slump of this magnitude, the rest of the world followed. But not this time. The markets pretty much shrugged it all off yesterday.

Why? (Maybe I should be asking: Why not?)

Probably one of the main reasons yesterday’s little hiccup in China was largely ignored by the wider markets is because there was a very good reason for stocks to fall. No one quite knew why the 9% plunge back in February actually happened, so investors immediately panicked that the big sell-off they’d all been anticipating was suddenly happening.

This time it’s obvious why Chinese stocks fell, so no one feels the need to panic. It’s nothing to do with the yen carry trade, or global inflationary pressures, or geopolitical disaster. The Chinese government simply trebled stamp duty overnight. That's it. Period. However, it’s still much lower than it is in Singapore, rising from 0.1% to 0.3%, compared to our 0.5%. But even so, when your trading costs jump like that, even the most ardent speculator has to pause to think for a moment.

Of course, the fact that the Chinese market has already risen by more than 50% this year means the speculators probably won’t stop to think for long. After all, who cares about 0.3% stamp duty when you’ll probably see a return 100 times that size inside your first six months of trading? At least if past performance is anything to go by.

So this is another of those moves by the Chinese government which says “we want everyone to know that we’re aware of this stock market bubble, but we don’t actually want it to burst.” And it’s not every day as a government that you get the chance to triple a tax & can still feel confident that people will happily pay it without rioting in the streets. After all, this is a bubble, so it’s the only responsible thing for the authorities to do.

Besides, they’re probably feeling a little bit cheated by the stock market boom. A World Bank report has found that the Chinese government could have got a lot more for all those state-run companies that have listed on the stock market. The World Bank reckons Beijing has lost nearly $10bn this year alone, because it has priced its assets too conservatively when they float.

For example, on its first day of trading, government-controlled lender Bank of Communications saw its share price jump by 70%, suggesting that its initial public offering (IPO) price could have been pitched at least a little bit higher without crimping investor demand. Of course, you could argue that maybe the Chinese have a better idea of exactly how much their banks are worth & are just glad to have them off their hands. We’ll just have to wait and see how it all pans out when the stock bubble does finally pop.

So all eyes are now focusing on Friday's opening. If market show further signs of weakness by lunch, please wear your seat belt. Your stomach might churn come Monday. Good luck to all.

He who has Health

For he who has health has hope; & he who has hope, has everything.

- Owen Arthur

Laughter is ...

Laughter is the most healthful exertion.

- Christoph Wilhelm Hufeland

Never Risk Your Health

To get rich, never risk your health. For it is the truth that health is the Wealth of Wealth.

- Richard Baker

The Greatest Game Ever Played

A golf drama based on the true story of the 1913 US Open, where 20-year-old Francis Ouimet defeated his idol, 1900 US Open champion, Englishman, Harry Vardon.

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Near the turn of the 20th century, young Harry Vardon becomes a champion golfer but learns that his amazing skill is no match for the class boundaries that exclude him from "gentlemanly" English society. A dozen years later, a young American, Francis Ouimet, fights against the same prejudice, as well as his own father's disdain, for a chance to participate in the U.S. Open against his idol - Harry Vardon. The struggles of both men for acceptance provides the background for an amazing contest of skills.

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Notably Quotes

Eddie Lowery: You need this for 72. Read it, roll it, hole it.

Eddie Lowery: Easy peasy lemon squeasy.

Eddie Lowery: Okie Dokie Private Smokey.

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Harry Vardon: [to Lord Northcliff] Let me tell you something. I came here to win a trophy. And on the face of it Ted Ray or I should carry it off. Not for you, not for England, but for sheer bloody pride at being the best, that's why we do this. And if Mr. Ouimet wins tomorrow, it's because he's the best, because of who he is. Not who his father was, not how much money he's got, because of who he bloody is! And I'll thank you to remember that. And I'll thank you to show the respect a gentleman gives as a matter of course.

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Eddie Lowery: You gotta' settle down Francis.

Francis Ouimet: Yeah, & how do you expect to do that?

Eddie Lowery: [looking at Francis] You just havetuh play better. [backing up]

Eddie Lowery: Keep your head down!

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Francis Ouimet: All I want is a chance.

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Most powerful phrase

There are 2 kinds of golfers: Those who keep his nerve & win championships, & those who don't.

- Harry Vardon

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Facts

Harry Vardon won six Open Championships, a record that still stands today.

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Francis Ouimet (1893 - 1967) won the 1913 U.S. Open. He also won the U.S. Amateur Championship twice, in 1914 & 1931. He played on the first eight Walker Cup Teams & was Captain of the next four for a team record of 11-1. In 1951 he became the first American elected Captain of the Royal & Ancient Golf Club of St Andrews & in 1955 was the first-ever winner of the Bob Jones Award, the highest honor given by the United States Golf Association in recognition of distinguished sportsmanship in golf. Ouimet has been named to every Golf Hall of Fame, & has a room named after him in the USGA Museum. He remained an amateur for his entire golf career.

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Eddie Lowery (1903 – 1984) was an American caddy, amateur golfer & businessman. He is best known as the 10-year-old caddy of Francis Ouimet during the 1913 U.S. Open. He became a multi-millionaire as an auto dealer in San Francisco.

Lowery & Ouimet remained life-long friends & when Ouimet died in 1967, Lowery was one of the pall-bearers.

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Key Lesson

A major theme that runs throughout the movie is friendship. When the Open committee members suggested to replace Eddie with a more experienced caddy, Ouimet objected, turned to Eddie & said, "It's between you & me. We are a team. They don't get a vote in this." With this words, Eddie & Francis raced off to take the championship.

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In life, we all need a friend & buddy, or be one, just as Eddie is to Francis. This "caddy" principle carries our burden, sharpen our perspectives, provide guidance to us in the golf course of life, & keep our nerve together when we are under pressures. Looking back, I am thankful I have quite a few of these "caddies" in my life. Up till now, I have been a beneficiary of their love & friendship. I hope I am one to many others too.

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Together, let's hit some birdies & eagles!!!

To Insure Good Health

To insure good health:

Eat lightly,
Breathe deeply,
Live moderately,
Cultivate cheerfulness, &
Maintain an interest in life.

- William Londen

4 Cardinal Rules For Dreams

Dreams are:

Created based on your Belief,

Built on your Conviction,

Realised on your Perseverance, &

Repeated on your Desire.

- Unknown Author