Yikes… I’m usually not averse to a bit of market volatility. After a certain number of years’ investing you learn to shrug off the apparent evaporation overnight of hefty-sounding amounts of your paper wealth. “Some have the speed and the right combinations, but if you can’t take the punches, it don’t mean a thing” (Warren Zevon). The days following 9/11, the depths of the SARS panic and the plunge in markets and indicators like Asian export volumes in 2008/09 were all excellent buying opportunities for those of us who could keep their heads and stomachs together. The Chinese word for crisis does not, as a million bores believe, combine the characters for danger and opportunity – but it would be great if it did because we may now be heading for the really Big One, which will put the others in the shade.
At least that’s the impression you get if you read sites like Zerohedge. If you thought Europe would get over its problems once Chancellor Angela Merkel accepted that every German family has to adopt a non-live-in Greek for the next few years, try their apocalyptic vision of contagion and markets pulling the plug on the whole of the north Mediterranean littoral, plus Ireland and Belgium. Add to that similarly nightmarish pictures of Mainland Chinese cities running up trillions of Yuan in debts after splurging on white elephant infrastructure projects, and you hardly have enough time left to think about the US, where the economy is in such fine shape that the most pressing issue is the right of the people to keep and bear light bulbs that waste 95% of the energy they consume.
Zerohedge is basically the Blair Witch Project for people who are into economics and money; if you don’t want to be frightened for a kick, or tempted into burying bars of gold in the woods, don’t look at it. There are plenty of calmer and more restful sources of opinion; Hong Kong’s very own Quamnet is unflappable and usually cautiously optimistic about life in general, thanks to an almost Zen-like lack of concern about the mayhem going on out there in the big wide world, over which our own little corner of paradise will surely float, unharmed, with its P/E ratios remaining not too demanding and its dividend yields rather attractive.
Which brings us to the subject of bargain-hunting. Fashion chain Esprit (330)? Professionally run – something I am a bit old-fashioned about – and recently subject to what looks like panic selling to the point it could be considered undervalued. Their clothes designs strike me as tiresome, but what do I know about that? The upside is Mainland expansion and the Chinese consumer story. The downside is their core traditional customer base: Northern Europeans, shortly to be diverting their spare spending cash to keep less fortunate neighbours in moussaka and ouzo. Unless…