A bubble that can't be read

Summary: The decline of Chinese concept stocks in recent days, does it mean that the dotcom bubble will repeat itself ten years ago? At least for now, the story will last a long time before the global monetary tightening and higher interest rates have been implemented. How painful it will be when the foam breaks

Does the fall in Chinese concept stocks in recent days mean that the dotcom bubble will repeat itself ten years ago?

At least for now, the story will last a long time before the global monetary tightening and higher interest rates have been implemented. How painful will the injury be after the bursting of the bubble? The mess of Silicon Valley, the collapse of internet companies everywhere, the last bubble of the pain of most Chinese investors have not experienced.

Who gets the last stick?

"This bubble is likely to be no longer the same as the last bubble period of a large number of sky-high value companies, share price fluctuations may not be so large, and because of China's economic development, the Chinese company's profitability than the last time a significant improvement." If the government does not join the game, the bursting of the bubble may be the beginning of the world's private investors and private funds. Internet commentator Liu Xingliang (Weibo) thinks.

Individual investors have also seen opportunities in China's concept stocks. Some of China's best-known bloggers, claiming they don't own U.S. stock accounts, have called on the internet to "bottom up" or invest in U.S. stocks as the Chinese concept shares fall. But the fall in the Chinese concept stocks has left individual investors feeling the pressure to buy a Li Ru cigarette (a pseudonym) that buys Sina's shares at a 140-dollar wave of prices every day.

Looking at the current fall to 110 U.S. dollars Sina shares, Li Ru smoke face bleak to friends inquiries: "Sina Weibo so have potential, can rise to 200 dollars ah?" ”

In addition to the continued bullish on Sina stock is willing to hold the long-term, Li Ru smoke has also been in a number of low-cost small plate China's concept stocks had a somersault, because in the forum to see a stock will rise, Li Ru smoke buy one of the stock, the result of 30% loss clearance, "I can't stand it's toss, rose a few days fall." ”

In August last year, a Li Ru of China's A-shares killed into the U.S. stock market, at the initial stage of the time that he was "the stock", more than 30% of the proceeds of his four or five friends around his call also to the market, but after the current round of Chinese concept stocks fell, the overall loss of Li Ru smoke has reached 20%.

Relative to Li Ru smoke loss of state, Li Ru smoke friends are much luckier, because most people are in the recent market, so many of the stock performance is quite good, they are now every day in the study of the Chinese concept of the earnings and announcements, and for the daily stock market changes emotions.

Like most of China's entry-level investors who have gone through a a-share slump, Li Ruyan said, "If the share price goes up, I will not fry the U.S. stock market." I'm not worried about a good company going bankrupt anyway. ”

The enthusiasm of China's individual investors to fry U.S. stocks has just begun, and last year the Chinese professional U.S. stock website, founder Fang Sanwen, told reporters that web traffic has risen more than 100% per cent since this year.

Bo, the Internet commentator, argues that the main driver of the stock-market boom is overseas funding.

China's private equity fund is also a bit helpless and can not understand.

Once VC, now UC chairman and CEO Yu (Micro Bo) that year if the investment enterprises to reach 10 million U.S. dollars, is already a big project, but Yu told reporters: "Now a small investment projects are 10 million of dollars, and enterprises to obtain financing information is very frequent." ”

Why is it easier for startups to get financing than before? Angel investor Shire (Weibo) revealed that at present, there are more than 5,000 private equity funds in China, and after the government crackdown on house prices, a lot of hot money into the stock market, Shire a year ago to invest in the Huayi Brothers, the gem listed after the return of investment more than 100 times times, "So a good company has more than 10 funds to rob ”

And at the international, the Fund is equally abundant, Shire thinks, although the Chinese small plate concept stock frequently goes to the US to list, but the real giant crocodile Facebook still does not go on the market, the capital tide just started, "no real giant listed." ”

A bubble that can't be read

With the history of the dotcom bust that America's High-tech companies have suffered, Zhang Chaoyang, chairman of Sohu board, said the biggest difference between the bubble and the last bubble was that the upper hand was for American companies, and this time for Chinese companies, "two rounds of bubbles are similar to looking at concepts only, not looking at company fundamentals, not similar to Now investors are less aware of China. ”

China's second-largest gaming company NetEase as an example, as of December 31, 2010, NetEase 2010 net profit of 2.2 billion yuan (about 339 million U.S. dollars), growth rate of about 16%, NetEase's cash and time deposits for a total of 9.5 billion yuan (about 1.4 billion U.S. dollars), But investors may not like a smooth-running company, and they prefer the newly-listed fast-growing Chinese companies.

For example, in 2010, the company adjusted net profit of 17.379 million US dollars, but the gross profit margin of 2008~2010 for three years continued to rise, with 58.9%, 77.8% and 78.3% respectively.

So, while NetEase is earning about 20 times times as much as everyone else's, the company's market capitalisation, which lost $2.6 million in the first quarter of this year, reached $7.1 billion after the opening of the NYSE on May 4, 2011, surpassing the market value of NetEase's Day.

The current online earnings multiples are usually between 8 and 10 times times, making Charles Zhang even more puzzled by the fact that, from a P/E perspective, U.S. stocks have reached a frenzy, with "unlisted companies worth less than listed, and companies that make money less than those who lose." ”

Thankfully, the asset bubble of top tech companies has not yet reached 1999 years, and Microsoft's market capitalisation in Friday was about $207.95 billion trillion, but less than half the value of Microsoft's $500 billion trillion on July 16, 1999.