China stocks trader counts his losses: ‘Never trust the government’

03-Aug (BBC) — Plato got his nickname when he was a student in Manchester. But he’s not feeling like the philosopher king now.

His finance degree helped him get a management job at a Beijing hospital. But it didn’t warn him off the rollercoaster Chinese stock market. Monday’s plunge in prices was the last straw.

The 28-year-old has just sold half his stocks for half of what he paid for them.

“I feel so disappointed. I needed that money for the downpayment on an apartment. I was hoping to buy something near a good primary school for my son.”

…Plato stayed out of the stock market for nearly a decade. He didn’t trust its fickle ups and downs. There was no logic, no transparency. But eventually he, like millions of others, was seduced by the long bull run of last year.

“I bought in because I could see that the government wanted the market to go up and if the government wanted it to happen, well then it would happen.

China’s stock markets are dominated by individual investors. For more than a year the market only went up and everyone felt richer. Not any more. And the credibility of the government is at stake.

“In the beginning I thought the government was trying to do its best,” Plato said. “But now I’m really angry. They just cheated.

“People trusted the government but the government let them down. It encouraged people to buy stocks but its turned out to be a joke. The lesson is never trust the government.”

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PG View: ‘No logic and no transparency,’ could arguably be used to describe the U.S. stock market these days as well.