Is China Facing a Boom or Bust?

"When the inevitable correction comes and good value appears, I look forward to making some quality recommendations. I'm not predicting China to endure a nasty, drawn out depression like the US and Japan experienced previously. But it will go through a post credit boom hangover. The result will likely be another round of extreme equity market volatility. Be sure you have cash on hand to take advantage."

Incidentally, Slipstream Trader Murray Dawes would probably be sympathetic to Greg's view. Murray put out a new trade yesterday in which he said, "I have been banging on for a while about my feelings that the market is entering a sell zone and I think it's time to start playing the market from the short side.”

Obviously we can't tell you what trade Murray recommended. But we would like to point out that if you don't have a macro view in this market, you're going to get blindsided. And having a bearish macro view doesn't mean you can't make money. Murray writes that, "I see this position as a way to get short the market as a whole because I believe the index charts are all pointing to some weakness dead ahead. The ASX200 in particular is today looking close to confirming a false break of the January highs of 4,955 after touching the 50% retracement from the crash."

Greg has a macro view. And his strategy is to avoid the correction and have enough cash to take advantage of the values when they emerge again. That sounds sensible.

It's important to remember that no one knows what the market is going to do. We were asked recently by an interrogator if publishing seemingly contradictory positions on the stock market was, well, contradictory. Shouldn't we be consistent?

We explained that is was not our primary mission to be consistent. That means sticking dogmatically to a view because you're too stubborn to change your mind. Or, in the case of investment advice, because your business has a vested interest in promoting a certain outcome or view point.

Our business is to find and publish intelligent and well-researched ideas about how to make money in the stock market. Smart people often disagree. And we see no reason to try to arbitrate their disagreements. We don't know who's going to be right.

But we do know that it's better to have hard-working people beavering away on their best ideas in their chose areas of expertise, and then to let the market decide what works best. This way, you have a portfolio of well-researched views and ideas from real independent analysts who are not serving any other interests.

And when it comes down to it, how and if any of these ideas fit in with your own financial plan is ultimately up to you. A free, thoughtful, and financially independent person wouldn't have it any other way.