So, I was having lunch with my boss, and guess what happened? This middle-aged uncle, maybe in his 40s or 50s, sitting at the next table, started talking super loudly about China stocks with his friends! He said he invested in Alibaba and was all excited because the PE is super low. He also talked about how the Chinese government is doing all these things to boost the economy, like giving vouchers and subsidies for buying appliances and EVs. Oh, and he was raving about how the 11-11 festival made crazy profits for the e-commerce companies!
But here’s the thing which he didn't consider
—those vouchers and subsidies are like a one-time thing. Once people buy their stuff, they won’t need it again for ages, so sales will probably drop later. And sure, 11-11 brings huge sales, but guess what? Tons of people return stuff after—it’s like record-high returns!
The Chinese stock market feels like someone who’s addicted to sugar. Every time there’s a new “boost,” it gets all hyper and shoots up, but then it crashes right back down when the sugar rush wears off.
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