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The Trillion Dollar Corporation [The Great Bubble of China]
Back on October 15th, 2007 I made mention of PetroChina’s sharp rise in market valuation. Warren Buffet sold off most if not all of his shares. BIG MISTAKE. PetroChina is now the WORLD’S MOST VALUABLE COMPANY and at over $1Trillion, “The Chinese oil producer trades at almost 60 times earnings in Shanghai, compared with Exxon’s valuation of 13 times. PetroChina’s market value is higher than Russia’s gross domestic product.”
This company is WAY OVERVALUED. Most Chinese Securities are very ambiguous and structured in unWestern ways. Their accounting principles are vastly different. I say CAVEAT EMPTOR. China is NOT Switzerland. Will some Chinese supercompanies truly emerge? You bet. We ain’t seen nothing, but this is still premature. I’m highly suspicious of PetroChina. China’s economy is laden with tons of debt, the Communist Party and ironically it’s way too dependent upon the United States. Can you make money with the Dragon? YEP. Just remember it’s not like investing at home.
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