Buffett urges caution on China stocks

Billionaire Warren Buffett said investors should be “cautious'' about China's stocks after the country's benchmark index more than doubled this year.
“We never buy stocks when we see prices soaring,'' Buffett said yesterday in Dalian, north-eastern China, where he is visiting a subsidiary of his Berkshire Hathaway Inc. “We buy stocks because we're confident of the company's growth. People should be cautious when they see prices rising.''

Buffett has sold shares in PetroChina Co, which has risen 76% this year to become the world's second biggest company by market value. China's benchmark CSI 300 stock index has climbed 48% since May 17, when Li Ka-shing, Asia's richest man, said there “must be a bubble''.
“Buffett is right about China stocks, whose valuations are too high,'' said Wang Zheng of Everbright Securities Co in Shanghai. “It doesn't make sense any more to still play in such a market. It's about time to pull out of it.''
Buffett said he was “appreciative'' of PetroChina's performance and that he was doubtful he could find another stock like it. Berkshire owned more than 10% of PetroChina's publicly held shares as of the end of last year. It owned 3.1% of the publicly held shares as of Sept 30, according to disclosures. The company has sold all of its holding, Buffett said in a Fox Business Network interview on Oct 18.
Buffett, 77, and chairman of Berkshire Hathaway, transformed the company over four decades from a failing textile maker into a US$200bil investment and holding company with businesses ranging from ice cream and underwear to insurance and corporate jet leasing. His investments are followed worldwide. The company's stock has risen 16% this year.
Buffett said he was seeking to invest in large Asian companies with businesses he understood. He denied Chinese media reports that Berkshire had invested in China Life Insurance Co.

Only qualified investors can trade in Chinese shares on the mainland. Some companies, such as PetroChina, trade in Hong Kong and can be bought and sold by any investor.
“If you understand a business and buy at a reasonable price, there's no risk,'' Buffett said. “We've never realised a loss because we understand the businesses that we buy into.''

Tracking the Dow on Wednesday(24/10/07)---Mid-week(pivot)

Overnight spinning top at the close really cost the bull to topple over this mornin' and has to seek physician treatment before conditions stabilised between 11:15am till 2:15pm.At the close,2 powerful advancing soldier with a small bearish inverted hammer...a temporary pause before it move forward further.

These pair of candlestick,bullish engulfing!!!

A "dragonfly doji" on Wednesday depicted that the bulls have overwhelm the bears.The closing above the MAV line is forward looking.In the event of bearish reversal,the long shadow (tail) of the dragonfly candlestick will be filled so it will be ranged bound only.http://www.litwick.com/indicators/1110.html