Sunday, August 07, 2005

This was Friday's Headline Aug 5, 2005--Touted as the Chinese Google, the search-engine operator opened at more than double the $27 IPO price, then surged for a 354% run to 122.54. was helped by talk that Google, (GOOG) which owns 2.6%, wants to buy it. The 1st-day gain ranks the 18th highest in history and No. 1 for a foreign firm's U.S. IPO. Some other Chinese net firms had solid gains.......Back in 2003 I wrote the following--The next big mania in stocks—China. In the next few years, hundreds if not thousands of new IPO’s will come to the market as Chinese ADR’s. At first, the supply of available companies will be small, causing the stocks to shoot straight up. Mutual funds that invest in China will become the hot funds. Chinese stocks will have internet like valuations as analysts try to justify the run-up using “new era” analysis.Then sometime in late 2006 Time Magazine will declare some Chinese entrepreneur as its Person of the Year. Months later the bubble will burst when the greedy discover that the “emperor has no clothes”; that the valuations were based upon fuzzy Chinese accounting; that there really weren’t any earnings. Sound familiar? The more things change, the more they stay the same.... It looks like we have at least another six months of the Chinese stock mania before it all starts tumbling.