No man is an Iland, intire of it selfe; every man is a peece of the Continent, a part of the maine; if a Clod bee washed away by the Sea, Europe is the lesse, as well as if a Promontorie were, as well as if a Mannor of thy friends or of thine owne were; any mans death diminishes me, because I am involved in Mankinde;
And therefore never send to know for whom the bell tolls; It tolls for thee.
John Donne, Meditation XVII, 1624
They say that no-one rings a bell at market tops or bottoms. I'm beginning to think that this may not be completely accurate.
That said, my white crash-alert flag of surrender is well and truly tattered. Its been buffeted and trampled on so firmly by a huge bull run, that I've been tempted to take it down, and admit I was wrong.
But then along comes Alibaba. My saviour!
Shares in Alibaba rose 36% on the first day of trading; therefore its P/E is 61. And lest we forget, those shares are not really holdings in the underlying company, but are actually holdings in a "variable interest entity". Understand that? Nor me! But basically, the Chinese government has disallowed overseas shareholders from holding proper shares. To cap it all, governance has been questionable, with Jack Ma, Alibaba's founder, allegedly pulling a fast one in 2010 with Alipay.
Have we entered the "irrational exuberance" stage of the bull? Maybe. When the retail investor starts piling in we'll know for sure. Whether this is the start point, only hindsight will tell. An investor has three options, go long (buy), go short (sell), be out (sit in cash or near-cash holdings).
I'm keeping the latter topped up. What goes up, also comes down. When it comes down, that's when opportunities present themselves.
