China's #1... and maybe with room to run
Is the Chinese bubble about to burst? Or is there still plenty of room for this bull to run? Even Jim Rogers says he'll bail if the Shanghai Composite reaches 10,000 by next February (as I write it's 5667)… but now comes some interesting anecdotal evidence that suggests momentum remains with the China bulls.
It's a fascinating article with an even more fascinating chart in the New York Times listing the world's 20 largest companies in 1989, 1999, and today.
In 1989, the list was dominated by 14 Japanese companies. And those 14 accounted for nearly 3/4 of the value of the top 20.
In 1999, the list was dominated by 14 U.S. companies. And those 14 accounted for 3/4 of the value of the top 20.
Well, China's number one… but it's not nearly as dominant as Japan in '89 or the U.S. in '99.
Eight of the 20 biggest companies are Chinese, and they account for 41% of the value of the top 20. And while the biggest company in '89 was Japanese (Nippon Telegraph and Telephone) and in '99 was American (Microsoft)… the biggest company today is still American (ExxonMobil).
None of this is to say that China is destined to reach the same level of dominance as Japan at the end of the 80s or the U.S. at the end of the 90s… but the parallels sure are interesting.
The other interesting thing is that while banks dominated the list in '89, and tech/telcom in '99… what's the dominant sector today? Eight of the top 20 are energy companies — another sure sign of a new energy crisis that's just getting cranked up.