sad investor
China COSCO has plummeted some 90% in five years, hitting one Shanghai investor particularly hard.
Photo: Internet

Main reference: Story in Shanghai Online

ONE SHANGHAI WOMAN'S sharebuying activity is causing friction in her marriage, job and even health, with a doctor declaring her clinically depressed due to the bear market.

What can we learn from this poor investor’s travails?

If the financial capital of Asia is still Hong Kong, then its biggest rivals are most certainly Tokyo, Singapore and Shanghai.

And the last is the most likely among the lot to surpass the Special Administrative Region’s de facto status as the regional Financial Capital sooner rather than later.

It has not a little to do with the fact that Shanghai’s population is perhaps three times that of Hong Kong, depending on which statistics are held as gospel.

So taking a closer than polite look at the trials and tribulations of a retail investor in China’s biggest city is more than likely to qualify as solid fodder for shareholders looking for warning signs of addiction or burnout.

At least one Shanghai-based investor is struggling to keep her head above water.

To switch to a weather-based conversation, we in temperate northern climes are all aware that the thermometer has continued to plummet that past few months, not unlike China-listed A-shares.

Investor sentiment has also been in deepfreeze mode for much of 2012 in Mainland China, and if the bears are calling the shots in the PRC equity markets, these carnivores are most certainly of the polar variety.

Hibernator (冬眠) is no different than anyone else in cyberspace in that this anonymous Shanghai housewife likes to hide behind her virtual name, and would never dream of sharing valuable stock tips with online strangers.

But Hibernator is not the master of her destiny – and which investor is?

In fact, it could be argued that she is a reluctant pawn in the chicanery and gristmill that is the A-share markets.

At last count, there were 168 million Chinese households holding shares in A-share listed firms.

But given the protracted bear market for most of this year in Shanghai and Shenzhen, it can be extrapolated that only one third of existing shareholders have anything to grin about.

A-shares have left many investors in the lurch this year

The pain of losing money outright, and squandering future savings that could be spend on junior’s education rather than whimsical speculation is fretful enough by its own right.

But for Hibernator -- aka Lu Nan – things were more painful than surface statistics might reveal.

She is willing and able to admit that her losses in the capital markets of late have been painful on a visceral level.

Though still relatively young but retired from active work, Lu Nan was ready to be the good wife and daughter in law.

In 2007, long before the whisperings of the Wall Street meltdown were become stentorian in their warning, Lu Nan lapped up shares of China COSCO Holdings Company Ltd (SHA: 601919) at over sixty yuan a share.

Unluckily for poor Ms. Lu, a half decade later only sees the shipping powerhouse’s shares barely keeping its head above water at around four yuan.

This is hardly a rarity in this grizzly-like stock scenario.

China Cosco is one of the worst performers over the past half decade.

Unluckily for Ms. Lu, the firm is joined at the hip with external demand, and when this hapless Shanghai investor bought into this export play, all bets were off when Wall Street succumbed to a major sinkhole.

And it turns out that the reason she has "retired" is that her condition doesn't allow her to hold down a steady job.

While our hearts go out to Ms. Lu, we all can learn the lesson here:

Never put all our eggs in one basket.

See also:

PASSE PREMIUMS: China Shares Now Cheaper Than HK Twins

Gold Or Homes? JIM ROGERS Tips On China

Main China Investment Themes For 2013

BLAME GAME: Finger Pointing Futile Amid China Slump

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