Money For the Rest of Us
From Boom to Bust: Why China's Stocks Lagged Behind Its Economy and Where to Invest Next
Aug 23, 2023
The podcast discusses the underperformance of China's stock market compared to its strong economy. It explores the factors contributing to this, including economic and governance issues, and highlights the potential for future investment opportunities in emerging markets. The podcast also touches on the impact of health care on China's economy, the current state of the stock market, and the challenges and opportunities in investing in India's technology sector.
28:30
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Quick takeaways
- Despite China's significant economic growth, its stock market has severely underperformed over the past 30 years due to lackluster earnings growth.
- China's stock market faces challenges from state-owned enterprises, lack of transparency, and slowing demographics, but it still has potential for development.
Deep dives
China's stock market underperformance
Despite China's significant economic growth, the Chinese stock market has severely underperformed, with annualized returns of less than 1% over the past 30 years. This is surprising considering the 42-fold increase in China's GDP and the stock market's growth from less than $100 billion to $12 trillion in market capitalization.
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