To The Moon

The Shanghai Composite Index has recently surged to a nearly 10-year high. This sounds like a cause for celebration—a bull market roaring back to life, right? But interestingly, the chatter in investment groups isn’t full of euphoria. Instead, people are asking: “Is it time to cash out?”

SSE Comp (000001.SH)

Looking at the WeChat Index search trend for “bull market,” sentiment is surprisingly muted. Compared to last year’s Sept. 24 levels, interest is only just picking up. The market has recently reached a new high, but the mood seems cautious rather than euphoric.

My Take: If I Had Chinese Shares

I don’t currently hold any Chinese assets. But if I did, I can imagine my instinct would lean toward selling to lock in profits. Why? Because I’m naturally kancheong—a little anxious and quick to act when there’s money on the table. Historically, whenever I’ve made a profit in any market, I tend to sell early. I’d worry the gains might evaporate if I wait too long.

So, in a booming China market, my spiders-and-kancheong nature would probably have me cashing out rather than doubling down.

Why I’m Not Buying Now

Even if I considered buying, the current market makes it difficult. Prices across the board are relatively high, reflecting the broader bullish trend. Good companies at bargain valuations are hard to find.

And the same kancheong tendencies that make me sell early would likely make me nervous if I bought at these levels. I could imagine constantly checking prices, worrying about a dip, and regretting my decision. That’s not a comfortable mental space to invest from.

Lessons from Past China Market Cycles

Looking back, China’s market has shown some dramatic swings:

1. 2007 Peak and Crash – The Shanghai Composite hit a record high in October 2007 before losing over a lot in the following year. Investors who cashed out at the top preserved gains, while those who held saw significant paper losses.

2. 2015 Bubble – The market soared early in the year, with retail investors piling in. A sharp correction wiped out much of the gains within months. Early profit-takers were in a better position than long-term holders who panicked mid-crash.

3. Covid Rebound (2020-2021) – After the initial pandemic dip, the market recovered quickly. Investors who held or added at lower valuations did well, showing that timing matters.

These examples show a consistent pattern: human behavior and timing often matter as much as market fundamentals. Selling too early can mean missing some upside, but holding too long can erase hard-earned gains. It’s a delicate balance and one I tend to struggle with, thanks to my kancheong nature.

Behavioral Insights and Market Context

This is a classic example of how behavioral biases intersect with market dynamics:

• Profit Anxiety – Many investors feel compelled to sell when their positions are in the green, fearing a reversal.

• High Price Aversion – Buying at elevated prices triggers hesitation, even when fundamentals are solid.

• Sentiment vs. Reality – While prices are at a multi-year high, public sentiment hasn’t caught up, creating a dissonance between market action and emotional response.

Sometimes, the market can climb while most people remain skeptical, a phenomenon that can persist longer than expected.

Speculating on What Could Happen Next

If I were to play out scenarios in my head, a few possibilities emerge:

1. The Bull Continues – The market could keep climbing. Shares might rise further, rewarding patient investors.

2. A Short-Term Pullback – After a sharp run, a correction could happen. Those who sold early would feel safe, while latecomers might panic. Even a modest 5–10% drop can feel dramatic in a high-flying market.

3. Volatile Rollercoaster – The market might oscillate up and down, reflecting mixed sentiment and external shocks. This kind of environment can be stressful for anxious investors, reinforcing the temptation to sell whenever there’s a gain.

Thinking through these scenarios reminds me that uncertainty is the only certainty in investing. Even when the market hits new highs, there’s no guarantee that the next move is up or down.

Personal Reflection

If I owned Chinese shares now, I’d likely take profits rather than chase higher prices. Buying now? Not appealing. Even if there are promising companies, the elevated valuations and my own tendency toward kancheong behavior make it hard to justify opening new positions.

In short: the market can soar, but my instincts and human nature would probably have me stepping aside rather than diving in. Past cycles and possible scenarios show that timing, sentiment, and emotion often matter as much as the numbers on the chart.