Investing in Emerging Markets: The Chinese Stock Market's Secret Past

On the other hand, a very insightful column about the history of Chinese stock market points to the pitfalls of investing in a market which one doesn't understand very well. This is quite an insightful article that points to the need for caution as one considers investing in emerging markets, not just in China.
The Intelligent Investor: The Chinese Stock Market's Secret Past - "Stocks began trading in Shanghai in the 1860s. The first 'share mania' struck in 1871, when shipping stocks rose by as much as 70%. In 1882, there was another bubble, this time in mining stocks launched by provincial governments. From 1889 to 1891, Shanghai was gripped by a mania for real-estate development companies. In 1910 came a boom in rubber plantations.

Each time, officially sponsored banks flooded the market with cheap credit—much as their successors have done recently. Each time, investors were swept up with enthusiasm, and the boom ended up in an inevitable bust."
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