Super-investor Jim Rogers, who began buying Chinese stocks more than 20 years ago, now says the market has turned frothy.
“I haven’t bought equities since I last bought Chinese shares in October,” Rogers told Bloomberg.
The market “has gotten ahead of itself,” he says.
The Shanghai Stock Exchange Composite Index has soared 80 percent so far this year, as the economy rebounded to annualized growth of 7.9 percent in the second quarter.
But the weakness of China’s export markets, particularly the U.S. and Europe, will weigh on China’s economy, Rogers says.
In addition, “you’re going to see inflationary pressures in China,” he says. “They’ve printed a lot of money. They’ve spent a lot of money.”
To be sure, Rogers doesn’t advocate dumping Chinese stocks. “Selling China in 2009 would be like selling America in 1909,” he says.
But “Would I buy them now, absolutely not. … I’m not jumping into a moving bus.”
Rogers reiterated his criticism of Federal Reserve Chairman Ben Bernanke. “He should have resigned,” Rogers says.
“That man’s been wrong for 300 weeks going on 400 weeks. It’s mind boggling to me. ... They have printed so much money, and they have taken on such staggering amounts of debt. Nobody really knows how much debt.”
As for Chinese stocks, not everyone sees them as overvalued.
"Resource-related companies are expected to attract more funds as the global economy has shown some signs of recovery," Zhou Lin, an analyst at Huatai Securities, told Dow Jones.
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