Chinese ADRs are Crazy

The Chinese ADRs are on fire. Never have seen anything like it.

Comparing to A-shares, the ADRs are mostly cheaper by 30-50%. But this is just discounting for the fact that the Chinese market is in a bubble.

Comparing to H-shares, the ADRs are actually 5-10% more expensive! Don't know what to make of that one.

The Chinese regulations on QDII sounded like a good design: half the money has to support China related shares. Allowing money out of China reduces pressure on the Chinese bubble as well as the Chinese currency to appreciate. Reserving money for China related shares supports Chinese companies overseas while avoid buying to much oversea assets that are too expensive already.

I still think the Chinese Government's sovereign fund is a bad, bad idea. Bad idea, bad timing in terms of western market valuations. Sovereigns just should not play the stock market. Maybe it's okay for tiny countries like Singapore. Imagine the Federal Reserve getting into the stock market, it's just not done.

QDII good. Sovereign fund bad.