Mobius: China’s “extreme, desperate” actions add to pain of share mkt crash
The best time to judge the character of people is during times of crisis. For the world’s major investors, in this respect China’s authorities have been weighed and found wanting. The world’s leading Emerging Markets investment personality, Mark Mobius, is among the big money managers who are highly critical of the Chinese reaction to its market’s boom and bust. Half of the listed companies have simply suspended trading in their shares. And after other interventions failed, China’s Government has now banned big investors from selling their stakes in those businesses where trading is still allowed. At a Berkshire Hathaway AGM a while back, chairman Warren Buffett was asked whether he would invest in Russia, the “hot” market at that time. He said he wouldn’t, recounting his experience of some years earlier. Buffett had helped fund an exploration business which battled for years to discover anything meaningful. When it eventually hit a good deposit, Russian politicians claim-jumped it and the team of explorers had to run for their lives leaving behind all their equipment – and wiping out years of investment. In their efforts to address the collapse of an overheated share market, Chinese authorities now risk doubling its impact by alienating those who control the world’s long-term investment capital. Those of the ilk of Mobius and Buffett have long memories. – Alec Hogg
Link to full articleI agree, don't think we have seen the end of the drama.
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