Last week I mentioned that China was down a lot and I questioned whether it might make sense to dip a toe back in.

After a couple more down days it has had a couple of very big up days. The move is being attributed to a decrease in a tax that was recently increased to stem stock market speculation.

The government’s involvement on both sides belies the relative newness of stock market investing for the country. It seems to me that with newness comes the potential for mistakes. Mistakes of this sort don’t necessarily make China any more or less an attractive destination but I do believe creates a visibility for bigger booms and busts to continue into the future.

This all might flow into an idea I have expressed before that maybe buy and hold should be replaced with buy and hope to hold. If you bought just about any Chinese stock in 2004 or 2005 you have made a lot of money. If you still have that same stock you are probably down quite a ways from its peak. Perhaps this is a lesson for the future. There is nothing wrong with taking a little off the table in a stock (or narrow based fund) if it doubles much faster than the market.

Last 5 posts by Roger Nusbaum

• The Big Picture for the Week of November 15, 2009 - November 14th, 2009
• Process Drilldown - October 23rd, 2009
• Sunday Morning Coffee 10-18-09 - October 18th, 2009
• A Little Followup From This Morning - October 8th, 2009
• Wednesday Roundup - October 7th, 2009