Why Talk of a China Bubble is off the Mark

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.
Chinese Flag in Shape of China

Don’t Fall for the China Bubble Chatter

There was a whole lot of chatter out there in the financial media this week regarding China, more specifically on the question of whether a China equity bubble is starting to burst.

My recommendation to you, especially if you have money in Chinese stocks, is to not fall for what I consider to be the false narrative that there is a China equity bubble.

Yes, Chinese stocks have seen big gains this year. Those gains have been particularly robust in the A-shares market, with funds like the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) surging some 70% during the past six months.


During the past five trading sessions, ASHR has given back some ground. How much ground are we talking about? Try 3.46%.

Yes, that’s right, 3.46% in a week vs. nearly 74% gains in the fund before the trading week began.

If you call that a bubble bursting, then I’ve got a bridge to sell you.

I jest, of course, but you get the point. The idea that somehow any real damage is taking place in China just isn’t borne out by the numbers.

In large-cap Chinese stocks, you might be able to make a case that a slight pullback is taking place. For example, the iShares Large-Cap China (FXI) is up 20% during the past six months, and during the past five trading sessions it’s down… 1.87%.

Wait, the bubble chatter is over a 1.87% decline???

Well, here again I jest, but reducing this bubble chatter to an absurdity is deserving of humor, as it is eminently laughable when compared to the actual facts.

Exclusive  Market Rally Has Some High Hurdles To Clear  


Now, to be fair, there were legitimate reasons why stocks in China pulled back this week.

Higher margin requirements announced by a few major brokers, reports that regulators were scrutinizing banks over money flows into stock markets and the meltdown of several China solar stocks all weighed down the country’s markets.

Yet none of these reasons is any serious cause for concern. The real cause for concern is buying into the China bubble chatter, and to that I recommend you — just say no!

Want to find out how my subscribers are logging huge gains in Chinese stocks? Then check out my Successful ETF Investing newsletter today!

Buffett (not Warren) on Indecision

“Indecision may or may not be my problem.”

— Jimmy Buffett

Always the entertaining singer, songwriter and entrepreneur, Jimmy Buffett also has a knack for delivering pearls of wisdom. Here he jokingly reminds us of the perils of indecision, a vice that may or may not hurt us when trying to make investment decisions.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Weekly ETF Report readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

In case you missed it, I encourage you to read my e-letter column from last week about why investors shouldn’t let recent market highs make them complacent. I also invite you to comment in the space provided below.

share on:
share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor