Stansberry Research Sentiment Towards China

Stansberry Research is one of the world’s leading research investment firms. Their primary business is researching the causes of rising and falling prices in various asset classes (Stansberryresearch). They produce regular content that aims to inform readers of changes that are occurring across the world in hopes of allowing readers to make profitable investments. Stansberry Research releases newsletters that cover topics of economic interest from around the world. Just recently they published an editorial that was related to the economic crash that is occurring in China currently.

The current economic crash in China is a result of deregulation, lower taxes, and high levels of interest that are causing major difficulties for banks and other financial firms in the nation. Stansberry Research believes that it is possible to make a fortune by betting against the banks in China similarly to how Steve Eiseman bet against American banks during the 2008 financial crisis. Currently, Steve Eiseman is feeling bullish about the banking industry. As a result of the short-term trading vehicle, the velocity shares daily inverse increasing by over 100% in one day.

Over the last month, Chinese stocks have fallen in value following their American counterparts. This is the worst performance possible from the Chinese stock portfolio. He cautions readers to reduce the size of their portfolios with assets that are based in China. However, it is not unusual to see a pullback after seeing significant gains such as those that have been seen over the last several years based on Stansberry Research. In fact, several of the stocks that are part of his portfolio have seen greater than 100% returns in the last year which is absolutely phenomenal. This is creating a wave of volatility. Volatility is a measure of how quickly prices change. This can be a good thing as it means that prices rise quickly, but it can also be bad as it means that prices drop quickly. Currently, in China, there is a very high measure of volatility. This means that prices of all asset classes are both rising and falling incredibly rapidly. This means that is a risky investment to invest in Chinese businesses as of now.