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Stock market 'air force commander' Hou surrenders to bulls
By Li Xiang (China Daily)
Updated: 2009-11-14 10:07
After all the brouhaha of predicting market moods, well-known stock market commentator Hou Ning, nicknamed commander-in-chief of the "stock market airforce", has finally decided to surrender meekly to the rampaging bulls.
Hou, famous for his predictions of stock market declines, recently wrote in his blog that he would not make any predictions on the market trends for the next six months.
The recent rallies have indeed derailed Hou's statements. The benchmark Shanghai Composite Index gained 14 percent in the third quarter to reach 3,187 points on Friday.
Earlier this year, Hou predicted that the index would hit a peak of 2,402 points this year and would then start declining. He went on to add that despite all the rallies the market may witness during the year, the benchmark gauge would continue to hover around 1,664 points.
Hou shot into limelight last year when he correctly predicted that the market barometer would peak to 6,124 points and from then on fall to crash below 1,800 points.
But his magic predictions have failed to stand the test of time this year as the bourses have been witnessing a strong bullish trend in the past few months with small corrections.
Market insiders feel that Hou's retreat was primarily due to the sustained bull rally.
"It's better to remain silent now than to make any wrong predictions as the chances of the market slumping is almost negligible," Shui Pi, an independent financial analyst, said in the Shenzhen Economic Daily.
Individual investors, on the other hand, are not so surprised at Hou's hasty retreat.
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"Who would blame them for their kind warnings even if they are proven wrong?" he said.
Buying stocks based on commentaries in the media is quite common among new and small investors in China. A survey by the Shenzhen Stock Exchange in September showed that 49 percent of the small investors relied on stock commentaries in the media to make investments.
"With more than 1,000 stocks in the market, how could a new investor know which is the right scrip to buy and when is the right time to sell?" Xin said.
Most analysts feel that the current uptrend is unlikely to change in the long run given the positive figures of the overall economy and the improved liquidity in the market.
"The market could see small volatility toward the end of the year, but as the economy continues to gather steam, the trend will continue to improve further fueling more investor confidence," said Zhang Xiang, an analyst with Guodu Securities.
