Investor Says Chinese Stock Market ‘Less Safe Than A Casino’

A Chinese investor has labelled the stock market worse than a casino amid a stock buying frenzy, the New York Times has reported. 

The word casino conjures up images of people sitting around tables chancing their luck and more often than not throwing their hard-earned cash away on that final roll of the dice. Perhaps the investor’s analogy is closer to the truth than one could imagine. 

Those who have disposable income to invest are lining up to invest in the stock market in an effort to boost the Chinese economy, which according to some is a market full of risks.  

Investing in National Economy, a High-Risk Gamble 

The economy is undoubtedly in trouble, but wealthy Chinese investors are stepping in to inject life into the stock market to gain a sense of control over their financial situation. Investors are rallying around the market with an air of being in control of something they believe the government should be managing—the economy. 

It is being described as the biggest rally since 2008, with investors hoping for short-term gains with the risk of losing it all. Casino seems to be the most appropriate word but how fair is that? 

Investors Taking Charge of Own Destiny  

For the investors, it is all about controlling their own destiny rather than being sitting ducks for the economy to come crashing down in what could be one of the greatest financial disasters in the making—China’s stock market collapse.   

China reinstituted stock trading in the early 1990s. The recipe for disaster began when Chinese people invested in real estate only to see the government, which owns all land, and the banks reap the benefits. Is it any wonder that some chose to stick their cash under the mattress?  

Comparison to Casino Not Strictly Fair

Casinos have a bad enough name as it is so to put the record straight, the comparison may not be that fair. Casinos are regulated and have strict rules. People can win and walk away with the money. Casinos are not state-owned. You play against the casino, they cannot play alongside you.  

There is a sense of foreboding doom amongst the investors in China. 

They may hope that they will win, and that win may even translate as rescuing the economy for the greater good, but they could just be further lining the pockets of those who have already accumulated incredible wealth on the backs of their labours.  

Others are more realistic and accept that even a rush of investors, almost like a Ponzi scheme, will not fix what is broken in China. 

Still, to do nothing is not an option. Investors can only reason they might lose money in the stock market or by doing nothing but watch inflation erode the value of their savings. The major players have left the building.