Dear Warren,
I shall be less elaborate. After all, I am more comfortable in assessing a company than giving opinion to the economy.
Yes, I agree there is too much money after the limited supply of commodity and stocks in the emerging market. I'm also inclined to believe if the interest rate turns around and begins to go up (presumably in mid-2011), there will be a crash in the bond bubble and more money would turn to the stock market. (According to Adam Smith, that would also be a sign of improving profit of commercial firms, and a rapid drop of PE in many companies would drive the stock price even higher.)
But that's for medium to long term. For the short term (one to three months), I have difficulty to find many stocks with a really attractive price - based on their record in the past three years. I regularly screen 120 to 150 local stocks and often use the number of stocks being under-priced as an indicator of the near future. My recent calculation did not show many bargain issues - not really a good sign for the coming three months. (One difficulty is, of course, balance sheet are more difficult to interpret nowadays because change in asset value is considered as profit or loss. I am still trying to figure out how to get around with this.)
By the way, I am slightly uneasy to see so often Wen Jiabao but very little Hu Jintao on the media.
Sincerely,
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