Could The Chinese Stock Market Bust Actually Be Good For AAPL?

Posted: August 11, 2015 in AAPL, Apple, Business, China, Farros, Royal, Shanghai, Technology and Business

I get there is a lot screwed up about the Chinese stock market… top of which is government intervention.

However, there’s just something extra weird about the Chinese stock market “bust.”

As in, it happened so fast, I wonder how people even noticed?

Most bubbles take years to inflate.  That is significant because the longer something is inflating, the more people get sucked into the action that eventually get hurt.

But the bubble portion of the Chinese Shanghai market rose & fell within a few months… that’s like the blink of an eye.

Sure, over the last year the Shanghai has about doubled… and it’s reasonably to call that frothy.  But how about over the last five years?  It’s only up about 30% — TOTAL — for an economy that has been growing in double digits.

In contrast, most of the U.S. indices have about doubled during that same five years… for an economy that has only had low single-digit growth.

With a longer-term perspective, can we really say China’s stock market didn’t deserve at least some kind of fractional growth?  

But what is the effect on Chinese consumers?

Even with the recent fall, the Shanghai is still up over about a third year-to-date… which should make a lot of investors (not traders) still feel pretty good.

And to further minimize damage to the investing public, apparently 90% of Chinese families do not even own stocks.

So you wonder how a spike & “crash” that happened that quickly… that affects only a minority of buyers… and for the most part probably affects them in a positive way… could really wreck that much consumer buying havoc?

Of course, the reason I bring this up is because of AAPL… analysts are worried that Apple’s big Chinese growth engine is going to come to a screeching halt.

I just don’t see it.

Note that after our last two stock market crashes in the U.S. — and despite unemployment — spending actually went up.  Cheap energy was the reason… which we have now again.

So while I don’t disagree that the Chinese stock market — and the Chinese economy for that matter — may be really screwed up, I wonder if those people bailing on AAPL aren’t looking at this all wrong?

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