To Charlie Aitkin. Re China On Sale. I agree with your long term China Bull outlook. It’s also true that the 1 yr graph has Tencent, Travelsky and Ping An at a reasonable discount. However 5yr and 10 yr graphs suggest reversion to the mean will result in 20% + losses for medium term buyers. Further Alibaba sits in the very toppy Nasdaq which can only go down in the medium term notwithstanding an acceptable individual stock 5yr graph. Why will reversion to the long term mean not happen this time for the top 4.
A: Thanks for your comments.
Reversion to the mean is not necessarily a ‘given”, and then it is a question of timeframe. An offshore example is Amazon, a local example is CSL.
You are probably right long term – but that’s potentially years away.
Regards
