 "What can Chinese equity bulls learn from an Indian cricket fan?")
Not an obvious question, I must admit, but for someone that landed on the island of Hong Kong from the shores of Bombay just after the students at Tiananmen were sent packing, there have been two overwhelming factors in my life. As a trader, banker and finally private investor you cannot ignore the Chinese markets. Heck, if you’re at coffee barista, a hairdresser or a car salesmen here you don’t ignore the Chinese markets. How could you – there are huge electronic billboards that flash updates on the hottest stocks at every major corner of Kowloon and Central. Times Square has Disney, McDonalds and Broadway, Hong Kong has the Hang Seng and the H share.
The game of cricket was more challenging as a fan. For decades, the TV channels had no coverage. Even today to follow the Indian cricket team from Hong Kong requires the skills of an internet jockey and a subscription to a bevy of different niche channels.
So as an unabashed Indian cricket fan that has benefitted tremendously by living in and around China here are some tips:
Second, accept that your team (or Chinese market) is not that great. Or more politely put, it’s a work in progress. Just as we Indian fans do not get taken in by our journalists and TV commentators calling our prima donna players the best in the world, you should not believe the hype from your press and politburo. Do not believe it even if it is often times endorsed by learned Westerners. They’ve waxed eloquent about our batting to us in the past. And then they’ve bailed on us. They are fickle. As an Indian cricket fan you cannot afford to be fickle. You have to stay the course and accept.
If you find that difficult, here are some statistics to help. The Indian cricket team over the last 3 years won 1.85 games for every game they lost (One Days – who really watches Tests these days? And trust me the Test statistics are worse). Not bad you say. The Aussies won 2.42 times for every loss. Over ten years it gets worse and over 30 even worse. As I said, a work in progress. Now to your equity market. It’s up a little over 50% in the last three years even after the last couple of weeks’ vicious falls. Not bad you say. The S&P is up about 49%. Over ten years, it gets worse, the S&P handily thumped your market. In fact, the Chinese equity market flatters to deceive. It does nothing for years and then rallies 400%. Within months it falls back to earth and then lies comatose for another few years only to rise precipitously and now fall again. Sisyphus would have been proud.
Third, do not get upset with the waste and the scandals. The BCCI billions have led to match-fixing, corruption and vast sums of money down the drain. Your trillions have done much the same – in your case they call it shadow banking, but once you develop the patience be secure in the knowledge that the weight of money will improve your lot over time. Just as the BCCI’s TV earnings have resulted in better stadiums, better TV coverage and yes better results, your markets have returned decent if not spectacular returns for those that stayed the course.
In sum, the lot of a Chinese Equity Bull and an Indian Cricket Fan is very similar. The promise of reforms and thereafter a glorious era is always just around the corner.
The game of cricket was more challenging as a fan. For decades, the TV channels had no coverage. Even today to follow the Indian cricket team from Hong Kong requires the skills of an internet jockey and a subscription to a bevy of different niche channels.
So as an unabashed Indian cricket fan that has benefitted tremendously by living in and around China here are some tips:
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First, this too shall pass. We have been whitewashed in a Test series and bounced back in the next series repeatedly. For all you golfers, that’s like not making the cut for the weekend play and then coming back to win the monthly medal. Learn to take the highs and the lows. As the Chinese newspaper said yesterday – After cloud and rain, the sun always shines.
Second, accept that your team (or Chinese market) is not that great. Or more politely put, it’s a work in progress. Just as we Indian fans do not get taken in by our journalists and TV commentators calling our prima donna players the best in the world, you should not believe the hype from your press and politburo. Do not believe it even if it is often times endorsed by learned Westerners. They’ve waxed eloquent about our batting to us in the past. And then they’ve bailed on us. They are fickle. As an Indian cricket fan you cannot afford to be fickle. You have to stay the course and accept.
If you find that difficult, here are some statistics to help. The Indian cricket team over the last 3 years won 1.85 games for every game they lost (One Days – who really watches Tests these days? And trust me the Test statistics are worse). Not bad you say. The Aussies won 2.42 times for every loss. Over ten years it gets worse and over 30 even worse. As I said, a work in progress. Now to your equity market. It’s up a little over 50% in the last three years even after the last couple of weeks’ vicious falls. Not bad you say. The S&P is up about 49%. Over ten years, it gets worse, the S&P handily thumped your market. In fact, the Chinese equity market flatters to deceive. It does nothing for years and then rallies 400%. Within months it falls back to earth and then lies comatose for another few years only to rise precipitously and now fall again. Sisyphus would have been proud.
Third, do not get upset with the waste and the scandals. The BCCI billions have led to match-fixing, corruption and vast sums of money down the drain. Your trillions have done much the same – in your case they call it shadow banking, but once you develop the patience be secure in the knowledge that the weight of money will improve your lot over time. Just as the BCCI’s TV earnings have resulted in better stadiums, better TV coverage and yes better results, your markets have returned decent if not spectacular returns for those that stayed the course.
In sum, the lot of a Chinese Equity Bull and an Indian Cricket Fan is very similar. The promise of reforms and thereafter a glorious era is always just around the corner.