A little less than a month ago I posted that China’s stock market was overvalued. In the two and a half weeks after my post, the Shanghai Composite gained another eight percent. Do I feel foolish? Nope. That market is now down three percent from the day I posted (which is 10 percent from its peak.)
Don’t get excited by my apparent prescience. On a short-term basis, predicting stock prices is like rolling the dice. Over the long haul, though, I feel a lot more comfortable saying that highly valued things eventually come down.