As in life there is no guarantee, but a educated investor makes educated guesses, protects the wealth with various techniques, researches stocks better than most…

Bottom line – if you guys have a child who has started working, would you stop them from investing in stocks or mutual funds?

Btw, good for you, hzzz on your condo in Shanghai. I almost ended up buying one few years ago. My view on China’s real estate is still very bullish, simply because there is not much space and there are tons of people. If you believe in the long run China will achieve standards of living similar to that of the West, then competition for real estate will be even more fierce.

Well, I think its definitely true for villas. For condos, I suppose you can build more upwards and the sky is the limit.

Those who already have good amount of capital invest in real estate rather than stocks. The properties which I purchased in Shanghai in 2004 have increased by more than 5 times in value if you take into account of currency differences as well. In fact, the average condo/house price in good areas of Shanghai today is slightly below that of New York City (one of my neighbors recently sold her ~150 sq. meter condo for 6+Million RMB). A friend of mine who makes about 8k RMB per month bought a home in PuDong 6 years ago and the property values there went up alot more. While not everyone made off good with stocks in the last few years, just about everyone who invested in real estate in big cities did. Although I am sure the bubble will burst at some point, if you look at Hong Kong, Tokyo, and Taiwan real estate market you will see that even if they lose 30% of the value they will bounce back in a few years.

As a stock picker, I do not care about raising money for a company, but making money for myself or the clients for some. I contribute nothing to the society. Hopefully, I try to make money on better judgment than my opponents (every trade there is a buyer and a seller – also known as a winner and a loser).

There are many get rich stories.
* Friends who made over 1 M profit in 401K up to 4-1, 2000 and lost most after 2000.
* The winner of a stock competition (MSN) happened to be a Chinese and lost big in many trades he recommended.
Many, many more.

Some make good money for a reason.
* Cramer, host to Mad Moeny, must make good money selling books. He also make money by buying before he make his recommendation public.
* Following the insider trade info.

Colin, #3: “This is literally a case of a million monkeys at typewriters, and one of them coming up with shakespeare.”

That’s a great analogy for day traders. To me, they don’t add any intrinsic economic value to society – aside from if they earn a lot of money, they pay tax to the government.

But, folks, isn’t the stock market supposed to be a great way for companies to raise capital from the public? Isn’t this supposed to be a great way for the public to participate in the growth of their economy more than simply being an employee?

In the long run, I think many of these monkeys are going to be able to type Shakespeare though. Enough monkeys will have to have jumped out the window too, I suppose.

The thing striking for me about this translated story is Xie Xianqing’s qualities. He is very persistent and resourceful and courageous to go after what he wants. Also, having lost everything doesn’t stop him. (Gambling his family’s assets away is irresponsible.)

2) If he’s telling the truth about his investments, then he was incredibly lucky. I’m pretty sure not everybody who subscribed to the Shenzhen Special Zone Report back in 1991 made it rich.

3) I have to agree with Charlie here. Taiwan was – and to a degree still is – an example of just how over-hyped stockmarket investment can get. My old boss when I first worked in Taiwan would, when no getting thoroughly drunk, spend his time watching the stock market results on the television – he managed to waste a large sum of money through his idiotic investments.

Studies have proven time and time again that nobody can outperform the market outside of illegal activities (eg bernie madoff, inside traders) or sheer luck (read nassim taleb). And in fact, the financial markets are like casinos in that the odds favor the house, ie the brokers, brokerages, exchange, corporations, government, money managers, hedgies, etc. at the expense of the individual investor.

Stories like these are dangerous in that they give the false impression to would be investors that they can actually win at this game through their sheer intelligence and perseverance, and I fear very many may lose some or all of their wealth from it.

That being said, if you know how the game works, you could take advantage of these these dupes.

Truth be told, even in US stock market is run like a MLM(“mouse club”). It’s a gamble, and the share genius story hopefully is to be heeded, not emulated.

* When the market is good like China today, every one is a genius.

* When the market crashes, many will bankrupt.

* Good investors have been trained and they usually work for mutual funds to handle other people’s money. It is a professional job, and not a job for gamblers.

* The society will be bad at both extremes of the market. Hong Kong is a good example. When every one is busy ‘making money’, they will forget their regular jobs.

Family lives will be affected adversely by the ups and downs of the market.

* Chinese stock market is the wild, wild west. Insider trading is not enforced and financial data is manipulated. It takes years to clean it up.

Forget so-and-so making millions. Their gamble pays off this time, but there is no guarantee next time. If you know someone always beating the market by one or two points, stick with this guy. Avoid the guy doubling his money every year as next time he could lose all.